Intel’s board is being dragged into Delaware court for allegedly handing Washington a 10 per cent slice of the company to stop Trump taking swings.
A shareholder lawsuit claims Chipzilla’s leadership panicked about personal blowback from the Trump administration and cut a deal that was never in investors’ interests.
The suit calls the August 2025 transaction an “unlawful contract that gives the US government $11bn worth of Intel stock for no meaningful consideration in response to extortionary threats by the government”.
Shareholder Richard Paisner says Intel’s top brass were spooked into submission and stopped acting like grown-ups paid to protect shareholder value.
The filing claims the board fixated on “protecting their personal reputations, being free from attacks by President Trump and his supporters on social media and elsewhere”.
The row dates back to August, when Trump told Intel chief executive Lip-Bu Tan to quit, branding him “highly conflicted” after Republicans sniffed around his China-linked investment history.
Tan reportedly legged it to the White House soon after. Trump softened his tone, and the US government’s stake in Intel popped out of the sausage machine.
That equity was funded by converting $2.2bn in Chips Act grants, plus $8.9bn in federal grants that had been awarded but not yet paid, which is one way to do industrial policy.
The lawsuit alleges the stake was agreed “so that Tan could keep his job”, which makes it sound more like a protection racket.
It takes a swipe at Skadden, claiming the firm “simultaneously represented the Department of Commerce as a result of a similar shakedown by the Administration”.
Skadden sits in the wider mess of Wall Street law firms, cutting 2025 deals to offer pro bono help to Trump’s team, just to avoid being frozen out.
The suit names the US Department of Commerce and US Department of Commerce Secretary Howard Lutnick, as well as Intel board chair Frank Yeary, who retired from the board earlier this month.
Chipzilla shares have nearly doubled since the Commerce Department deal, leaving the California outfit hovering near a $250bn market capitalisation while the lawyers circle.
Tan took charge in March 2025 after Intel dumped Pat Gelsinger mid-plan to chase TSMC in advanced manufacturing and win external foundry customers.
Foundry losses hit $13.4bn in the year before Gelsinger was pushed out, and Tan later paused builds, including a big, planned Ohio facility, as Washington pushed for more US fabs.
Intel declined to comment, and the Commerce Department and Skadden did not immediately respond.
