Here’s what’s on our plate today:

• 📉 Can $10B in government cash rescue Intel’s AI future?

• 📰 Microsoft’s OpenAI rival, MathGPT expansion, and xAI’s coding leap.

• 🗳️ Should governments own chunks of tech giants? Cast your vote!

• 🧪 Try a productivity tool with no keyboard, and an AI tutor built for speed.

Let’s dive in. No floaties needed…

The Laboratory

Can a $10 billion government deal save Intel’s AI ambitions?

The rapid adoption of AI has forced companies to realign priorities. Tech giants like Google, Meta, and Microsoft pivoted from core businesses to developing large-scale AI models. Hardware makers shifted from microprocessors to GPUs and accelerators. Those that moved early are now positioned to dominate the AI market in both development and deployment.

In this race to switch course, Intel, once the dominant player in chip design and manufacturing, is struggling to regain its former glory. The company recently signed an agreement with the U.S. government, which will give the U.S. a 10% equity stake in exchange for $10 billion in funds for building or expanding factories in the country. While this agreement may help stabilize its financial situation, it is unlikely to fix its tech and customer gaps. Both of which are important for its long-term success.

Trump steps into Intel deal

Intel’s deal with the U.S. government is part of a broader push from the current administration to revive the country’s ability to design and manufacture advanced semiconductors. The deal aligns with the broader industrial policy to reshore chip production, particularly vital amid the global supply chain. It also sets the tone for how the administration may be looking to dominate the global AI supply chain.

In a post on his social media platform, Truth Social, U.S. President Donald Trump said, "I will make deals like that for our country all day long." He further added that he would help companies that make similar lucrative deals with the United States. His comments suggest he may pursue similar agreements with other tech companies.

According to a Reuters report, as per the current deal with Intel, the government will have passive ownership and would not include a board seat. Additionally, the government will be required to vote with Intel's board when shareholder approval is necessary, with "limited exceptions." However, the exceptions were not specified. The equity also includes a five-year warrant at $20 a share for an additional 5% of Intel stock, which the U.S. can use if Intel loses control of the foundry business.

For Intel, the deal does not mean more governmental support. On the contrary, the 10% stake represents $5.7 billion in unpaid grants from the Biden-era CHIPS Act and $3.2 billion from the Secure Enclave program, also launched under President Biden. As such, handing over stakes only ensures the continuance of government support, not additional support.

Why did Intel agree to the deal?

In 2024, Intel reported operating losses for its foundry businesses amounting to $7 billion, a steeper loss than the $5.2 billion in operating losses the year before. At the time, according to a Reuters report, Chief Executive Pat Gelsinger said 2024 would be the year of the worst operating losses for the company's chipmaking business and that it expects to break even on an operating basis by about 2027. Giving the government a passive, non-voting stake ensures Intel receives immediate funding while avoiding treatment as a loan. The deal also allows the company to avoid a painful stock sale in the market, which could have dented its reputation.

The deal will also allow Intel to sidestep agreements that force Nvidia and AMD to pay 15% of their revenues from the sale of their chips. Nvidia pays 15% of its revenues from H20 chips, while AMD shares the revenue generated from sales of its MI308 chip in China.

However, despite the benefits, the current deal does not ensure Intel’s revival in the chip domain.

Where does Intel stand in the AI race?

Intel’s downfall from controlling 80% of the market share in CPUs to its current predicament was not the result of a couple of missteps but decades of erosion. It was decades in the making. The company is facing threats from AMD, which aggressively ramped up performance in the CPU business. TSMC has taken the lead in foundries, and chip architectures have shifted away from Intel’s designs towards Arm, which are better suited for AI infrastructure. In this arena, the company faces challenges from Nvidia.

Despite repeated attempts at revival, Intel’s chip revenue has fallen short of projections. Intel’s Gaudi accelerators, designed to speed up AI applications, failed to impress and missed their $500 million sales forecast. CEO Pat Gelsinger attributed the lackluster uptake to software issues and complications transitioning from Gaudi 2 to Gaud 3. In 2025, he resigned from the post and was replaced by Lip-Bu Tan, who earlier served as the CEO of Cadence Design Systems.

The new CEO had an uphill battle, made difficult due to political pressure. Earlier this month, Trump called for Tan’s resignation because he had ties to the Chinese military. After a sit-down between the two, Trump dropped the idea and instead shifted focus to involving the administration in the company as a shareholder. Which, at least for now, appears to be a win-win for both. However, critics argue that the present deal breaks with American tradition and small-government conservative orthodoxy.

Intel faces a pivotal test

Intel’s deal with the U.S. government represents an interesting crossroads for both the government and the chipmaker. Economists warn that Trump’s involvement, and his promise to reward companies making deals with the government, could open the door to corruption and market inefficiencies.

Tad DeHaven, an economic policy analyst with the libertarian Cato Institute, told the BBC, “You're looking at investment decisions now having to be made based on politics, not economics.”

While Trump says that the government did not pay anything for Intel shares, the US converted unpaid construction grants designated in the 2023 Chips Act into non-voting shares. Additionally, Trump's motive may have been to protect the semiconductor industry, which many consider vital for national security; however, the legality of the move rests on assurances with little oversight.

James McRitchie, a private investor and shareholder activist in California who owns Intel shares, told Reuters that the deal sets a bad precedent: "It sets a bad precedent if the president can just take 10% of a company by threatening the CEO.”

However, it must be noted that America has a history of taking equity positions in times of crisis, including the 2008 financial crisis, though at the time they were temporary.

Other countries have also invested heavily in major companies to ensure their viability. For instance, the German state of Lower Saxony has a 20% stake in Volkswagen.

Regardless of how one views the investment, the deal has put Intel at a crossroads. On the one hand, the company benefits from the government’s support, while on the other, this support could drive potential customers away from rival countries.

The road ahead for Intel

The challenges for Intel are structural, not temporary. Its missed bets on mobile, years of delays in moving to advanced chip nodes, and failure to match Nvidia’s dominance in AI accelerators have eroded its reputation. The Gaudi missteps, compounded by weak software support, show a company struggling to adapt to the most important computing shift in decades.

At this juncture, the U.S. government’s involvement raises profound questions. The deal marks the start of a high-stakes experiment: it could become a springboard for revival or a cautionary tale about mixing politics and industry.

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Bite-Sized Brains

• Microsoft bets on itself: The company is rolling out new in-house AI models to reduce reliance on OpenAI and boost enterprise control.

• xAI enters agent mode: Elon Musk’s xAI launches a coding-focused model with “agentic” capabilities to write and execute tasks autonomously.

• MathGPT goes global: The AI math tutor, designed to prevent cheating while assisting learning, is now used in over 50 institutions worldwide.

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