The US government is seeking an equity stake in Intel as part of a deal to provide financial support to the struggling chipmaker.
United States Commerce Secretary Howard Lutnick stated that the government wants an equity stake in Intel in exchange for cash grants approved during the administration of former President Joe Biden.
Lutnick emphasized that the US does not want control of the company, saying, “It’s not governance, we are just converting what was a grant under Biden into equity for the Trump administration for the American people.”
The proposed equity stake would be a conversion of the grants, potentially increasing investment in Intel to help stabilize the company for chip production in the US.
Treasury Secretary Scott Bessent clarified that any US investment in Intel would aim to help the troubled chipmaker stabilize, rather than forcing US companies to buy chips from Intel.
Bessent noted, “The stake would be a conversion of the grants and maybe increase the investment into Intel to help stabilize the company for chip production here in the US.”
This development comes after Bloomberg News reported that the US government is in talks to take a 10 percent Intel stake in exchange for $7.9 billion in grants approved for the US chip company during the Biden administration.
Lutnick defended the move, saying, “the Biden administration literally was giving Intel money for free and giving TSMC money for free, and all these companies just giving the money for free, and Donald Trump turned it into saying, ‘hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action for the American taxpayer.'”
Intel has struggled to compete with rivals like Nvidia Corp and Advanced Micro Devices Inc, shedding thousands of workers and slashing costs under its new CEO, Lip-Bu Tan.
The company recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986. Intel plans to end the year with 75,000 “core” workers, excluding subsidiaries, through layoffs and attrition, down from 99,500 core employees at the end of 2024.
In a related development, SoftBank Group agreed to invest $2 billion into Intel, which has faced challenges after years of management blunders.
The US government’s potential equity stake in Intel would be “non-voting,” meaning it would not enable the government to dictate how the company is run.