In a surprising twist, the Trump administration is tightening its grip on Intel, aiming to influence crucial decisions regarding its struggling foundry business unit.

At a recent Deutsche Bank conference, Intel's CFO, David Zinsner, revealed pivotal insights into a recent partnership with the Trump administration that grants the U.S. government a 10% equity stake in the tech giant.

What’s more intriguing? The terms of the deal are designed to penalize Intel if they consider spinning off their foundry division, which is responsible for manufacturing custom chips for external clients, in the near future.

Last week's agreement also included a five-year warrant that enables the government to acquire an additional 5% stake in Intel at $20 per share if the company retains less than 51% interest in its foundry operations. Zinsner expressed optimism that this warrant would eventually expire.

"From the government's perspective, they want to ensure we don’t divest or sell that business unit," Zinsner noted, highlighting the administration's insistence on keeping Intel's foundry operations domestic.

Moreover, last Wednesday, Intel secured a hefty $5.7 billion in cash from this deal, as part of the funds tied to previous grants under the U.S. CHIPS and Science Act.

While White House press secretary Karoline Leavitt mentioned that the deal is still being finalized, Intel has mostly remained tight-lipped on the details.

This deal marks a significant step in the Trump administration's mission to bolster chip manufacturing in the U.S., amidst a growing dependency on the Taiwan Semiconductor Manufacturing Company for production.

However, the arrangement forces Intel to retain a money-losing division. The Intel Foundry has reported eye-popping operational losses of $3.1 billion in the last quarter alone, creating tension within the semiconductor sector.