New York (NCS) — The United States authorities is making an $8.9 billion funding in Intel frequent inventory, giving the Trump administration a roughly 10% stake in the struggling chipmaker, Intel and the president introduced on Friday.
“It is my Great Honor to report that the United States of America now fully owns and controls 10% of INTEL, a Great American Company that has an even more incredible future,” Trump wrote in a Truth Social post on Friday.
The announcement got here after Trump mentioned earlier in the Oval Office on Friday that the CEO of Intel had agreed to such a deal, including that he hopes to strike comparable offers with different corporations in the longer term.
“I said, I think you should pay us 10% of your company,” Trump mentioned of his conversations with Intel CEO Lip-Bu Tan. “And they said yes.”
Trump mentioned the deal will was a win for either side.
“I negotiated this Deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company,” Trump wrote in his Truth Social publish saying the deal. “The United States paid nothing for these Shares, and the Shares are now valued at approximately $11 Billion Dollars. This is a great Deal for America and, also, a great Deal for INTEL.”
The settlement is part of an effort to assist increase semiconductor manufacturing in the United States and cement the US as a chief in the worldwide chipmaking trade, a key precedence of Trump’s second time period to this point.
Trump has touted his shut ties to Nvidia CEO Jensen Huang and the AI chip large’s investments in the US as political victories, utilizing it as each a bargaining chip in trade talks with China and a means to strain US corporations like Intel to take a position in the US. Trump mentioned earlier this month that he plans to impose 100% tariffs on semiconductors coming into the nation, aside from corporations which have dedicated to constructing merchandise in the United States.
Two weeks in the past, Trump called for Tan’s immediate resignation following reviews about his alleged connections to China.
It just isn’t instantly clear whether or not the Trump administration goals to be in strategic decision-making on the firm. The deal provides the US authorities a passive possession in Intel, in accordance with the corporate’s press launch, “with no Board representation or other governance or information rights.”
The remaining $5.7 billion that Intel had been awarded however not but granted from the CHIPs and Science Act will fund the fairness, together with $3.2 billion that Intel had been promised from the Department of Defense as part of the Secure Enclave program. The authorities is buying 433.3 million shares at a value of $20.47 per share, or a 9.9% stake in the corporate.
“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made,” Lip-Bu Tan, CEO of Intel, mentioned in a press launch.
Trump additionally mentioned he would do extra of these varieties of offers. His administration has been weighing alternatives to take comparable stakes in numerous US corporations in crucial industries, two folks acquainted with the White House discussions on the matter told NCS last week.
The chipmaker’s inventory (INTC) rose 7% on Friday.
After Trump met with Tan on the White House final week, reports emerged that the White House was contemplating the bizarre transfer of taking an stake in Intel. Earlier this week, Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick confirmed the discussions, saying the deal would possible contain changing grant funding from the Biden-era CHIPS Act into an fairness stake.
“America should get the benefit of the bargain,” Lutnick informed CNBC.
On Friday following Trump’s announcement, Lutnick posted on X that “The United States of America now owns 10% of Intel, one of our great American technology companies.”
“This historic agreement strengthens US leadership in semiconductors, which will both grow our economy and help secure America’s technological edge,” Lutnick mentioned in the publish. “Thanks to Intel CEO (Lip-Bu Tan) for striking a deal that’s fair to Intel and fair to the American People.”
Like his predecessor, former President Joe Biden, Trump has mentioned that growing home manufacturing of semiconductors is a nationwide safety precedence, given their central function in merchandise starting from automobiles and iPhones to weapons and medical equipment. Currently, most of the world’s chips are produced in Taiwan, though a number of main tech corporations have been investing in elevated chipmaking capability in the United States in latest years.
Although it was as soon as one of America’s most vital tech corporations, Intel has fallen behind rivals after failing to anticipate successive know-how waves. Tan took over Intel in March and has been trying to show across the beleaguered firm. Intel mentioned final month that it had principally accomplished plans to lay off 15% of its employees as part of Tan’s efforts to proper the ship.
Japan’s SoftBank on Monday mentioned it might invest $2 billion into Intel.
Bloomberg reported final week that the White House desires to assist Intel comply with by on plans to open a new US manufacturing facility in Ohio, which has been repeatedly delayed amid the corporate’s monetary troubles. And Bessent confirmed on CNBC that an Intel stake can be supposed to “help stabilize the company for chip production here in the US.”
But it’s not clear how Trump’s funding will assist instantly clear up some of Intel’s core issues, particularly that it struggles to draw prospects with chip know-how that’s much less superior than that of rivals like TSMC.
Bessent indicated that the White House doesn’t plan to strain different US tech corporations to purchase Intel’s chips. He added that “the last thing we’re going to do is put pressure, is take the stake and then try to drum up business.”
It’s not the primary uncommon deal Trump has reached with US semiconductor corporations. Chipmakers Nvidia and AMD mentioned earlier this month that they might pay 15% from their chip gross sales in China to the federal government in alternate for export licenses, after the White House had previously said promoting their merchandise there posed a nationwide safety threat.
The-NCS-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.