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When asked how the government plans to fund $5,000 payments to every American adult, Commerce Secretary Howard Lutnick had a surprisingly specific answer: Intel.
The response ties together two of the Trump administration’s most ambitious economic gambits. One involves the federal government becoming the largest shareholder in America’s most storied chipmaker. The other involves cutting checks to roughly 200 million adults, a tab that would easily exceed $1 trillion.
From grants to equity: the Intel deal
In August 2025, the administration converted approximately $8.9 billion in grants originally allocated under the CHIPS and Science Act into an equity stake of roughly 9.9% to 10% in Intel Corp. That single transaction made the US federal government Intel’s largest shareholder.
The move was a sharp departure from how the Biden administration structured CHIPS Act funding. Under the previous approach, the government distributed grants to semiconductor companies to incentivize domestic manufacturing. No strings beyond the spending requirements, and certainly no ownership stake.
Lutnick has framed the shift as correcting what he considers a flawed strategy. His pitch: instead of handing out money with no financial upside for taxpayers, the government now holds “equity for the American people.” The prior administration had already disbursed roughly $2.2 billion in grants to Intel before the conversion took place.
President Trump went further, claiming he “PAID ZERO FOR INTEL” since the equity stake was funded by releasing money already committed under the CHIPS Act. In other words, the administration argues it didn’t spend new money. It just changed the terms on money that was already earmarked.
One important caveat: the government secured no governance or voting rights as part of the arrangement. It owns the stock but has no seat at the table when Intel’s board makes decisions.
Intel’s stock responded enthusiastically. Reports indicate the shares surged roughly 290% in value following the announcement.
The $5,000 question
The Intel stake matters beyond semiconductor policy because the administration is now using it as a talking point to justify an entirely separate proposal: $5,000 direct payments to American adults.
Trump proposed the payments in September 2025, contingent on Republican success in the 2026 midterm elections. The price tag is staggering. Even a rough estimate, multiplying $5,000 by the adult US population, lands well above $1 trillion.
Funding sources remain vague. Tariff revenue has been floated as one potential mechanism. But when pressed on the math, Lutnick pointed to the Intel equity deal as proof that the administration can generate returns on its investments rather than simply spending.
Broader implications and legal headwinds
The Intel deal isn’t a one-off. The administration has signaled that extracting equity from companies receiving federal funds could become standard practice. That prospect has already generated friction.
Intel faces shareholder lawsuits related to the equity arrangement. Existing shareholders, who saw their ownership diluted by the government’s stake, have raised legal challenges.
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