AI sovereignty and the Intel precedent

The U.S. government's decision to acquire a 10% equity stake in Intel represents more than a national security intervention - it signals a fundamental shift in how governments are asserting control over critical technologies. Multinationals may find themselves needing to quickly reassess how their supply chains, tech licensing and joint ventures are impacted if state involvement now means tighter scrutiny on how their business operates. 

The $8.9 billion U.S. equity investment in Intel, funded through federal grants under the 2022 Chips Act, marks a decisive departure from traditional subsidy models towards direct state ownership in strategic technology companies, establishing a precedent that will reshape global markets. 

Ownership-based tech governance: China and UK approaches 

This development reflects an evolution in governmental strategy which acknowledges the close relationship between AI and national security. In addition to conventional policy tools such as sanctions and export controls – governments are now exercising control over technology through direct or indirect ownership of technology manufacturers. This represents a paradigm shift with governments, including those of liberal market economies, shifting their role in technology markets from that of regulator to activist shareholder. 

In China, where such interventions are precedented, this strategy is now being deployed at unprecedented scale. Limited access to U.S technology and huge governmental funding are driving a massive growth in AI chip manufacturing capacity. China is also developing three new fabrication plants for Huawei's processors and developing chips adapted to DeepSeek's standards to create a parallel technological ecosystem.  

The UK has committed substantial resources to AI development, recognising Britain as "the third largest AI market in the world" and committing to "expand the capacity of the AI Research Resource (AIRR) by at least 20x by 2030". The new UK Sovereign AI unit will "partner with the private sector" through "public-private collaboration" with "the ability to collaborate internationally, create joint ventures, as well as invest in, incubate and spin out AI companies". 

Market implications: navigating the new landscape 

This shift towards state ownership in technology companies introduces unprecedented complexity across multiple dimensions: 

• Corporate Governance Revolution: Boards of directors may now be required to balance traditional fiduciary duties with public policy objectives, fundamentally altering decision-making frameworks.
• Regulatory Divergence: Companies operating across borders face increasing regulatory complexity - from the U.S.'s deregulatory "AI action plan" to Europe's comprehensive AI Act and the UK's current principles-based approach.
• Ownership-Based Controls: The Intel arrangement follows an emerging pattern in the US, which including deals with Nvidia and Advanced Micro Devices that permit sales of advanced AI processors to China on condition that resulting revenues flow back to Washington. Similarly, as a condition of permitting Japan’s Nippon Steel to acquire the U.S. Steel, the White House took a "golden share" in US Steel, providing the government a veto over certain corporate decisions.  

Strategic legal considerations for multinational corporations 

For multinational corporations, this environment demands sophisticated legal strategies that account for: 

• ownership transparency requirements across multiple jurisdictions with varying standards; 
• technology transfer restrictions that may apply differently based on state ownership structures; 
• compliance obligations that vary significantly between regulatory regimes; 
• strategic planning for potential government intervention in corporate decision-making; 
• due diligence frameworks that account for state ownership and control structures; and
• increasing use by governments of conventional policy tools such as sanctions and export controls and tariffs to maintain technological advantages through controlling transfers of sensitive technology.  

How to respond to these changes in real time 

In the short term, multinational companies (tech companies in particular) may wish to audit their supply chains and review any licensing agreements, joint ventures and partnerships to assess exposure to state-owned or state influenced entities. Enhanced due diligence frameworks and jurisdiction specific compliance processes may need to be considered to address varying transparency requirements across the US, EU, UK and China. At a governance level, there may be merit in adapting protocols to balance policy driven risks with commercial goals, whilst diversifying suppliers and building stronger government relations in key markets.  

For a lighter touch approach, Supplier diversification will be key in not overburdening operations. Future commercial contracts should be negotiated to allow for sudden policy shifts whilst safeguarding critical IP.  

In this rapidly transforming environment, legal clarity becomes a competitive advantage. TLT's deep expertise in sanctions law, international trade regulation, and AI governance positions us uniquely to guide both government clients designing sovereign interventions and technology companies navigating complex regulatory challenges. 

The Intel precedent may well mark the beginning of a new era where state ownership becomes a primary tool of technology governance - making sophisticated legal guidance not just valuable, but vital for competitive advantage. 

Authors: Caroline Ramsay, Ayla Skene, Michelle Sally, Tom Sharpe, Henry Joyce

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at September 2025. Specific advice should be sought for specific cases. For more information see our terms & conditions.