White House Confirms US is Negotiating a 10% Stake in Intel

The White House confirmed that the Trump administration is in negotiations for a deal in which the US government could obtain a 10% stake in Intel. White House press secretary Karoline Leavitt emphasized that the president's focus is on protecting America's interests from both security and economic viewpoints. According to Commerce Secretary Howard Lutnick, the deal may involve exchanging existing government grants for Intel stock. This rare strategy could help Intel compete with rivals such as Nvidia, Samsung, and TSMC, particularly in the AI chip sector.

Lutnick mentioned that the US seeks an equity stake in Intel in exchange for grants approved during the Biden administration, emphasizing that taxpayer money should result in equity rather than just grants. The deal, first reported last week, aims to support Intel’s plan to build a manufacturing hub in Ohio. Initially, White House officials called the reports mere speculation.

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Intelstated it is committed to supporting efforts to bolster US manufacturing and technology. Meanwhile, Softbank announced a $2 billion stake in Intel, signaling confidence in the company's turnaround, which led to a nearly 7% rise in Intel’s shares.

Despite capabilities, Intel lags behind rivals in high-end semiconductors. A government stake could strengthen its role, cut reliance on foreign suppliers, and address concerns about shrinking market share, analysts say. But converting grants to shares might create uncertainty for companies in federal programs and complicate operations.

Experts note that while government stakes were common during the 2008 crisis, such moves are now rare. Kevin J Fox of the University of New South Wales said Intel isn't at risk of collapse but warned that partial ownership could hinder efficiency and deter firms from accepting grants.

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