The U.S. government aims to take an equity stake in Intel, Commerce Secretary Howard Lutnick said Tuesday morning.
“We should get an equity stake for our money, so we’ll deliver the money which was already committed under the Biden administration,” Lutnick told CNBC. “We’ll get equity in return for it,” he added, and “get a good return for the American taxpayer.”
Lutnick added that the U.S. government would not get a voting stake with the investment or the rights to direct the company’s operations.
Intel declined to comment on Lutnick's remarks.
Intel has struggled to keep up with rival chipmakers Nvidia and AMD. Its stock, which has been up and down all year, rose 7% Tuesday as investors hailed the news. In addition, Japan’s SoftBank announced Monday that it would invest $2 billion in Intel to “deepen their commitment to investing in advanced technology and semiconductor innovation in the United States.”
An investment from the U.S. government would be the latest dramatic twist in the administration’s relationship with Intel. President Donald Trump has sought to revitalize American manufacturing of semiconductors by threatening tariffs as high as 100% on chip imports. But he also attacked Intel CEO Lip-Bu Tan and demanded his resignation over alleged ties to China. “There is no other solution to this problem,” Trump said on Aug. 7.
Days later, Tan and other top executives visited Trump at the White House. Trump said the meeting was “a very interesting one” while adding that Tan’s “rise is an amazing story.”
Trump said Tan and members of the Cabinet would “spend time together, and bring suggestions to me during the next week.”
Intel said in a statement after the meeting that it had a “constructive discussion on Intel’s commitment to strengthening U.S. technology and manufacturing leadership” with Trump. It added, “We appreciate the President’s strong leadership to advance these critical priorities and look forward to working closely with him and his Administration as we restore this great American company.”
Shortly thereafter, Bloomberg News reported that the government was considering taking a stake in the chipmaker itself.
“Instead of just giving grants away” under the CHIPS Act, which was passed during the Biden administration, Lutnick said, Trump thinks the government “should get benefits to the economics that we put out.”
The investment would also be the latest forged between the Trump administration and a large corporation. Earlier this summer, Trump approved the takeover of U.S. Steel by Japan's Nippon Steel after the companies gave the government a "golden share," which allows it to appoint a U.S. Steel board member and block a reduction in capital investments or workforce.
The Defense Department also recently invested more than $400 million into U.S.-based rare earths producer MP Materials.
The United States also recently approved export licenses for sales of some Nvidia and AMD chips into China after the companies agreed to give the government a 15% cut of its sales.
The United States has typically taken a direct stake in a company only during times of financial crisis, such as its 92% ownership of the finance and insurance giant AIG in 2008 or its more than $30 billion assistance to General Motors after it filed for bankruptcy protection in 2009.
Speaking separately on CNBC on Tuesday morning, Treasury Secretary Scott Bessent said any conversion of government grants into an investment in Intel would be to “help stabilize the company for chip production in the U.S.”
The CHIPS and Science Act, which President Joe Biden’s White House pushed to spur domestic semiconductor manufacturing, set aside $39 billion in loans and tax benefits for the Commerce Department to distribute. Intel was just one of several companies that expected to receive money under the legislation.
Intel had been awarded $10.9 billion in grants: $7.9 billion to support its domestic investment plans and $3 billion more to manufacture microelectronics for the Defense Department.
Lutnick did not say exactly how much of Intel the government’s investment would amount to, but he did not push back against recent reports that said it would be around 10%. The Commerce Department did not immediately respond to a request for comment.
Intel's market value Tuesday morning was about $111 billion.
