President Donald Trump on Friday announced the U.S. government has secured a 10% stake in struggling Silicon Valley pioneer Intel in a deal that was completed just a couple weeks after he was depicting the company’s CEO as a conflicted leader unfit for the job.

“The United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump wrote in a post.

The U.S. government is getting the stake through the conversion of $11.1 billion in previously issued funds and pledges. All told, the government is getting 433.3 million shares of non-voting stock priced at $20.47 apiece — a discount from Friday’s closing price at $24.80. That spread means the U.S. government already has a gain of $1.9 billion, on paper.

The remarkable turn of events makes the U.S. government one of Intel’s largest shareholders at a time that the Santa Clara, California, company is in the process of jettisoning more than 20,000 workers as part of its latest attempt to bounce back from years of missteps taken under a variety of CEOs.

Intel’s current CEO, Lip-Bu Tan, has only been on the job for slightly more than five months, an d earlier this month, it looked like he might be on shaky ground already after some lawmakers raised national security concerns about his past investments in Chinese companies while he was a venture capitalist. Trump latched on to those concerns in an August 7 post demanding that Tan resign.

But Trump backed off after the Malaysian-born Tan professed his allegiance to the U.S. in a public letter to Intel employees and went to the White House to meet with the president, leading to a deal that now has the U.S. government betting that the company is on the comeback trail after losing more than $22 billion since the end of 2023. Trump hailed Tan as “highly respected” CEO in his Friday post.

In a statement, Tan applauded Trump for “driving historic investments in a vital industry” and resolved to reward his faith in Intel. “We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership,” Tan said.

Intel’s current stock price is just slightly above where it was when Tan was hired in March and more than 60% below its peak of about $75 reached 25 years ago when its chips were still dominating the personal computer boom before being undercut by a shift to smartphones a few years later. The company’s market value currently stands at about $108 billion – a fraction of the current chip kingpin, Nvidia, which is valued at $4.3 trillion.

The stake is coming primarily through U.S. government grants to Intel through the CHIPS and Science Act that was started under President Joe Biden’s administration as a way to foster more domestic manufacturing of computer chips to lessen the dependence on overseas factories.

But the Trump administration, which has regularly pilloried the policies of the Biden administration, saw the CHIPs act as a needless giveaway and is now hoping to make a profit off the funding that had been pledged to Intel.

“We think America should get the benefit of the bargain,” U.S. Commerce Secretary Howard Lutnick said earlier this week. “It’s obvious that it’s the right move to make.”

About $7.8 billion had been been pledged to Intel under the incentives program, but only $2.2 billion had been funded so far. Another $3.2 billion of the government investment is coming through the funds from another program called “Secure Enclave.”

Although U.S. government can’t vote with its shares and won’t have a seat on Intel’s board of directors, critics of the deal view it as a troubling cross-pollination between the public and private sectors that could hurt the tech industry in a variety of ways.

For instance, more tech companies may feel pressured to buy potentially inferior chips from Intel to curry favor with Trump at a time that he is already waging a trade war that threatens to affect their products in a potential scenario cited by Scott Lincicome, vice president of general economics for the Cato Institute.

“Overall, it’s a horrendous move that will have real harms for U.S. companies, U.S. tech leadership, and the U.S. economy overall,” Lincicome posted Friday.

The 10% stake could also intensify the pressure already facing Tan, especially if Trump starts fixating on Intel’s stock price while resorting to his penchant for celebrating his past successes in business.

Nancy Tengler, CEO of money manager Laffer Tengler Investments, is among the investors who abandoned Intel years ago because of all the challenges facing Intel.

“I don’t see the benefit to the American taxpayer, nor do I see the benefit, necessarily to the chip industry,” Tengler said while also raising worries about Trump meddling in Intel’s business.

“I don’t care how good of businessman you are, give it to the private sector and let people like me be the critic and let the government get to the business of government.,” Tengler said.

Although rare, it’s not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM.

The U.S. government’s stake in Intel coincides with Trump’s push to bring production to the U.S., which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country’s dependence on chips manufactured overseas, the president believes the U.S. will be better positioned to maintain its technological lead on China in the race to create artificial intelligence.

Even before gaining the 10% stake in Intel, Trump had been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are powering the AI craze, to pay a 15% commission on their sales of chips in China in exchange for export licenses.

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Liedtke reported from San Ramon, California.

This story was originally featured on Fortune.com

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Google on Wednesday unveiled a new line-up of Pixel smartphones injected with another dose of artificial intelligence that’s designed to do everything from fetch vital information stored on the devices to help improve photos as they’re being taken.

The AI expansion on the four Pixel 10 models amplifies Google’s efforts to broaden the use of a technology that is already starting to reshape society. At the same time, Google is taking a swipe at Apple’s Achilles’ heel on the iPhone.

Apple so far has only been able to introduce a few basic AI features on the iPhone while failing to deliver on last year’s promise to deliver a more conversational and versatile version of its often-blundering virtual assistant Siri.

Without mentioning the iPhone by name, Google has already been mocking Apple’s missteps in online ads promoting the four new Pixel models as smartphones loaded with AI technology that consumers won’t have to wait for more than a year to arrive.

Google, in contrast, has been steadily increasing the amount of AI that it began to implant on its Pixels since 2023, with this year’s models taking it to another level.

Taking advantage of a more advanced processor, Google is introducing a new AI feature on the Pixel 10 phones called “Magic Cue” that’s designed to serve as a digital mind reader that automatically fetches information stored on the devices and displays the data at the time it’s needed. For instance, if a Pixel 10 user is calling up an airline, Magic Cue is supposed to instantaneously recognize the phone number and display the flight information if it’s in Gmail or a Google Calendar.

The Pixel 10 phones will also come with a preview feature of a new AI tool called “Camera Coach” that will automatically suggest the best framing and lighting angle as the lens is being aimed at a subject. Camera Coach will also recommend the best lens mode to use for an optimal picture.

The premium models — Pixel 10 Pro and Pixel 10 Pro XL — will also include a “Super Res” option that deploys a grab bag of software and AI tricks to zoom up to 100 times the resolution to capture the details of objects located miles away from the camera. The AI wizardry could happen without users even realizing it’s happening, making it even more difficult to know whether an image captured in a photo reflects how things really looked at the time a picture was taken or was modified by technology.

Google is also offering a free one-year subscription to its AI Pro plan to anyone who buys the more expensive Pixel 10 Pro or Pixel 10 Pro XL models in hopes of hooking more people on the Gemini toolkit it has assembled to compete against OpenAI’s ChatGPT.

The prices on all four Pixel 10 models will remain unchanged from last year’s Pixel 9 generation, with the basic starting at $800 and the Pro selling for $1,000, the Pro XL at $1,200 and a foldable version at $1,800. All the Pixel 10s expect the foldable model will be in stores on August 28. The Pixel 10 Pro Fold will be available starting October 9.

Although the Pixel smartphone remains a Lilliputian next to the Gulliverian stature of the iPhone and Samsung’s Galaxy models, Google’s ongoing advances in AI while holding the line on its marquee devices raise the competitive stakes.

“In the age of AI, it is a true laboratory of innovation,” Forrester Research analyst Thomas Husson said of the Pixel.

Apple, in particular, will be facing more pressure than usual when it introduces the next-generation iPhone next month. Although the company has already said the smarter Siri won’t be ready until next year at the earliest, Apple will still be expected to show some progress in AI to demonstrate the iPhone is adapting to technology’s AI evolution rather than tilting toward gradual obsolescence. Clinging to a once-successful formula eventually sank the BlackBerry and its physical keyboard when the iPhone and its touch screen came along nearly 20 years ago.

Apple’s pricing of the next iPhone will also be under the spotlight, given that the devices are made in China and India — two of the prime targets in President Donald Trump’s trade war.

But Apple appeared to gain a reprieve from Trump’s most onerous threats earlier this month by adding another $100 billion on top of an earlier $500 billion investment pledge to the U.S. The tariff relief may enable Apple to minimize or even avoid price increases for the iPhone, just as Google has done with the Pixel 10 models.

This story was originally featured on Fortune.com

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