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Trump says he should’ve asked for ‘more’ of Intel when negotiating stake with CEO

Daniel Nenni

Daniel Nenni

Founder
Staff member
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Key Points
  • - Donald Trump said in an interview with Fortune that he should’ve asked for a bigger stake in Intel.
  • - U.S. Commerce Secretary Howard Lutnick said in August the U.S. had taken a 10% holding in the then embattled chipmaker.
  • - Intel’s stock has since soared, increasing more than 300% on the back of landmark deals.
U.S. President Donald Trump has said he should have asked for a bigger stake in chipmaker Intel, nine months on from a landmark deal that saw the U.S. government take a 9.9% holding in the company.

Describing his interaction with Intel CEO Lip-Bu Tan, Trump told Fortune in an interview published Monday that he asked for “10% ownership for free” of the company, Tan replied “you have a deal,” and the president said: “S---, I should have asked for more.”

Trump also told the magazine that Intel would be “the biggest company in the world right now,” if he had been in office to protect it with tariffs, “when all these companies started sending their chips in from China.”

“Intel would have all that business now, and there would be no Taiwan,” he added, referring to Taiwan Semiconductor Manufacturing Co., the Taiwan-based world-leading chip manufacturer. TSMC has a market cap of $1.84 trillion, compared with Intel’s $547 billion.

In August, U.S. Commerce Secretary Howard Lutnick said the country had taken a stake in the chipmaker, whose share price had plummeted in preceding years. Government grants from the CHIPS Act of $5.7 billion, that had been awarded but not paid, were converted to equity along with $3.2 billion from separate government awards.

Intel’s stock has since increased by more than 300%.

Earlier this month, Apple and Intel reportedly reached a preliminary agreement that would see Intel make some chips for Apple devices, and Tesla CEO Elon Musk said in April he plans to rely on Intel’s future chips for his $119 billion Terafab project.

Trump told Fortune the U.S. was “beating” China on artificial intelligence “by a lot,” adding: “It’s important that we win.”

April was Intel’s best month in the chipmaker’s 55 years on the Nasdaq, with the stock more than doubling.

Intel’s rally has coincided with a resurgence of demand for its central processing unit, or CPU.

Bank of America predicts the CPU market could more than double by 2030, and Nvidia told CNBC in March that “CPUs are becoming the bottleneck” for AI.

“The CPU is reinserting itself as the indispensable foundation of the AI era,” Tan said on the company’s earnings call in April, adding that demand for its data center CPU exceeds supply.

www.cnbc.com

Trump says he should've asked for 'more' of Intel when negotiating stake with CEO

The chipmaker's stock has soared since the U.S. equity deal in August gave the government 9.9% of the company.
www.cnbc.com www.cnbc.com
 
Describing his interaction with Intel CEO Lip-Bu Tan, Trump told Fortune in an interview published Monday that he asked for “10% ownership for free” of the company, Tan replied “you have a deal,” and the president said: “S---, I should have asked for more.”
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Such eloquence!
 
MKWVentures said:
Its was a brilliant move by both sides.... incredible win win. US went from giving Intel 10B in gifts to ownership and profiting 40B on the deal. Intel doesnt have to jump through
hoops for grant money.
Click to expand...
Not so far off from the $80B the US government invested in GM and Chrysler during the W. Bush and Obama years using TARP. The only difference was that that both of those companies were on the verge of complete collapse in late 2008, hemorrhaging billions in losses and running out of cash within weeks of liquidation. GM lost $30.9 billion in 2008 alone (nearly $85 million per day), following a $40 billion loss in 2007, while burning through $19.2 billion in cash during 2008.
 
KevinK said:
Not so far off from the $80B the US government invested in GM and Chrysler during the W. Bush and Obama years using TARP. The only difference was that that both of those companies were on the verge of complete collapse in late 2008, hemorrhaging billions in losses and running out of cash within weeks of liquidation. GM lost $30.9 billion in 2008 alone (nearly $85 million per day), following a $40 billion loss in 2007, while burning through $19.2 billion in cash during 2008.
Click to expand...
I dont remember the details of those. DId the government take ownership stake and make a huge return? or was it a loan
 
MKWVentures said:
I dont remember the details of those. DId the government take ownership stake and make a huge return? or was it a loan
Click to expand...
It started out as conditional loans under Bush, but grew into loans/debt that converted to equity under Obama and included quick-dip bankruptcies for both. I think US government netted a $10B loss on the deal ($80B in), but also saved almost 1/2 million jobs.

At the time, Trump believed they needed to be saved but also believed both needed to go through bankruptcy, downsizing and asset sales first (he had plenty of appearances in the media about this).
 
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