President Donald Trump said Intel Corp. had agreed to give the US government a 10% equity stake in the beleaguered chipmaker, with a formal announcement expected on Friday, according to people familiar with the matter.
“They’ve agreed to do it and I think it’s a great deal for them,” Trump told reporters Friday at the White House.
Trump cast the agreement as one that would revitalize the company, saying that “Intel has been left behind” compared to competitors in the chipmaking industry, and that he had floated the idea when he met with Intel Chief Executive Officer Lip-Bu Tan earlier this month. Tan is expected to attend the event finalizing the agreement Friday at the White House.
“And I said, You know what? I think the United States should be given 10% of Intel, and he said, ‘I would consider that,’ and I said, ‘Well, I’d like you to do that,’” Trump said.
Talks had focused on converting grants under the Chips and Science Act into the equity stake.
The US taking partial ownership would mark a stunning level of intervention in an American company, shattering norms that investors and policymakers have long considered sacrosanct except in the most extraordinary situations such as war or a systemic economic crisis. Intel declined a request for comment on the announcement’s timing.
Intel’s shares extended their gains to as much as 6.6% on Friday.
Commerce Secretary Howard Lutnick has signaled that Trump wants to see more direct benefits to the US from funding key companies, telling CNBC earlier this week that the aim is to “get a good return for the American taxpayer instead of just giving grants away.”
The administration has not fully detailed its talks with Intel, or which companies it may be having similar discussions with. A US official, however, said that companies that are boosting investment pledges in the US like Taiwan Semiconductor Manufacturing Co. and Micron Technology Inc. will not be pressured to offer equity in exchange for funding.
Earlier: Trump Won’t Seek Equity From Chipmakers With US Investment Plans
Though the administration in recent weeks telegraphed its intentions, the Intel action leaves open untold risks that could distort markets and the flow of capital as well as lead to massive taxpayer losses. But the government’s bet could also pay off in a major way for a troubled chipmaker that was once a pioneer in the industry. Intel has faced a turbulent stretch with investors worried it is losing its technological edge and falling too far behind competitors.
Trump has embraced a new brand of economic statecraft in his second term as he looks to bolster domestic manufacturing, rebalance trade ties and ensure American dominance in critical sectors.
Trump in early August announced Nvidia Corp. and Advanced Micro Devices Inc. agreed to give the US government 15% of revenue generated from sales of artificial intelligence chips to China. That followed Trump earlier this year securing a “Golden Share” from Nippon Steel Corp., a Japanese steelmaker, that gives the president power to make decisions over United States Steel Corp.
