Trump administration in talks to take a 10% stake in Intel

by Mackenzie Hawkins, Ryan Gould and Josh Wingrove

The Trump administration is in discussions to take a stake of about 10% in Intel Corp., a move that could see the US become the beleaguered chipmaker’s largest shareholder.

The government’s plan, which would convert grants made under the US Chips and Science Act into equity, is under consideration just as SoftBank Group Corp. announced a surprise bet on Intel’s revival, agreeing to acquire a $2 billion stake in the company.

The US government and the Japanese tech conglomerate both see the potential for a turnaround at Intel, although each likely values different parts of the business. For the Trump administration, a recovery of the chipmaker’s manufacturing prowess would help win jobs and voters. For SoftBank, Intel’s chip design operations beckon with the promise of high margins. 

The federal government is considering a potential investment in Intel that would involve converting some or all of the company’s grants from the Chips Act into equity, said the people, who asked not to be identified because the information is confidential. Intel has been slated to receive a combined $10.9 billion in such grants for commercial and military production. The company can also draw on up to $11 billion in loans under the 2022 law. 

The grant money, which was originally designed to be disbursed over time as Intel meets project milestones, is roughly enough to pay for the targeted holding. At Intel’s current market value, a 10% stake in the chipmaker would be worth around $10.5 billion. The exact size of the stake, as well as whether the White House chooses to move ahead with the plan, is still in flux, the people said.

White House spokesman Kush Desai declined to comment on the specifics of the discussions, saying only that no deal is official until it’s announced by the administration. The Commerce Department, which oversees the Chips Act, also declined to comment. Intel didn’t respond to a request for comment. 

In a sign others see potential for a rebound in Intel’s fortunes, SoftBank announced its plan to buy new shares that the chipmaker would issue to the Japanese investor. The move is part of a broader push by SoftBank founder Masayoshi Son to capitalize on booming AI-related investment. 

Investors initially applauded news of the government investing in Intel, kicking off the biggest one-week rally in the stock since February. Intel shares slipped 3.7% on Monday after Bloomberg reported on the potential size of the US stake, before rebounding on the SoftBank deal. Shares of SoftBank fell 4% in Tokyo.

A big question is whether a government holding and SoftBank’s vote of confidence would help reinvigorate Intel’s business. The tech pioneer has fallen behind Taiwan Semiconductor Manufacturing Co. in contract chipmaking and Nvidia Corp. in chip design, missing out on a boom in spending on artificial intelligence.

New Chief Executive Officer Lip-Bu Tan is seeking a turnaround, but his efforts have largely been focused on cutting costs and eliminating jobs. Intel will add large-scale manufacturing capacity only once customers are committed to using its more advanced production techniques, Tan said last month, sparking concern among investors that the company may be bowing out of the race for semiconductor leadership.

The Trump administration is particularly focused on shoring up Intel’s sprawling project in Ohio, the home state of Vice President JD Vance. Intel has repeatedly delayed the anticipated opening of that site, which the company originally envisioned as the world’s biggest semiconductor facility.

Beyond Intel, the White House official also floated the possibility that the administration could convert other Chips Act awards into equity stakes. It’s not clear whether that idea has gained traction broadly within the administration or whether officials have broached the possibility with any companies that could be affected. 

The Chips Act set aside $39 billion in manufacturing grants — plus loans and tax credits — to revitalize the American semiconductor industry after decades of production shifting to Asia. Using Chips Act money for an Intel stake would mean the chipmaker isn’t necessarily getting a bigger government infusion than expected — possibly just one that’s on a faster timeline. As is the case for all Chips Act winners, Intel’s award was designed as a reimbursement, with the grant money split into tranches tied to specific project benchmarks. 

Intel had received $2.2 billion of its award as of January. It’s unclear whether that amount would be included in the possible equity stake, whether the company has received additional disbursements of its award since President Donald Trump took office, and on what schedule Intel would receive money under a possible equity stake. 

While TSMC and South Korea’s Samsung Electronics Co. are expanding their US operations with Chips Act support, having an American company like Intel building cutting-edge chips on domestic soil has been a priority for both the Trump and Biden administrations. 

Biden officials, for example, tried to get companies like Nvidia and Advanced Micro Devices Inc. to consider using Intel as a manufacturing partner, and also explored long-shot ideas like a tie-up between Intel and GlobalFoundries Inc.

Earlier this year, Trump’s team held early-stage conversations with TSMC about potentially operating Intel’s factories — an arrangement from which TSMC has backed away. Trump officials have also internally floated the prospect of seeking an Intel investment from the United Arab Emirates. It’s unclear whether either of those approaches has progressed much past a thought exercise. 

Washington has become more aggressive in strategic sectors. The Trump administration’s secured an agreement to receive a 15% cut of AI chip sales to China and took a so-called golden share in United States Steel Corp. as part of a deal to clear its sale to a Japanese rival. That’s while the Defense Department announced a plan that would make it the largest shareholder in US rare-earth producer MP Materials Corp.

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