Trump says Intel has agreed to a deal for US to take 10% equity stake

[Daniel Nenni]

(Reuters) -President Donald Trump said on Friday the U.S. would take a 10% stake in Intel under a deal with the struggling chipmaker and is planning more such moves, the latest extraordinary intervention by the White House in corporate America.

An official announcement on the arrangement is expected later in the day, a source familiar with the matter said.

The development follows a meeting between CEO Lip-Bu Tan and Trump earlier this month that was sparked by Trump's demand for the Intel chief's resignation over his ties to Chinese firms.

"He walked in wanting to keep his job and he ended up giving us $10 billion for the United States," Trump said on Friday.

Intel, whose shares rose more than 6%, declined to comment.

The move follows a $2 billion capital injection from SoftBank Group in what was a major vote of confidence for the troubled U.S. chipmaker in the middle of a turnaround.

Federal backing could give Intel more breathing room to revive its loss-making foundry business, analysts said, but it still suffers from a weak product roadmap and challenges in attracting customers to its new factories.

Trump, who met with Intel CEO Lip-Bu Tan on August 11, has taken an unprecedented approach to national security.

The U.S. president has pushed for multibillion-dollar government tie-ups in semiconductors and rare earths, such as a pay-for-play deal with Nvidia and an arrangement with rare-earth producer MP Materials, to secure critical minerals.

Tan, who took the top job at Intel in March, has been tasked to turn around the American chipmaking icon, which recorded an annual loss of $18.8 billion in 2024 — its first such loss since 1986. The company's last fiscal year of positive adjusted free cash flow was 2021.

https://finance.yahoo.com/news/trump-poised-unveil-intel-deal-173535353.html

(Reporting by Aditya Soni in Bengaluru, additional reporting by Juby Babu in Mexico City; Editing by Alan Barona and Maju Samuel)

Four people contributed to this article? Or they could have used one AI agent.

 

[Daniel Nenni]

That was fast:

Should the US Government Invest in Intel? - Semiwiki

“Most companies don’t die because they are wrong; most die because they don’t commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is standing still.” Andy Grove's Only the Paranoid Survive, first published in 1996. Looking back...

semiwiki.com

 

[hist78]

That was fast:

Should the US Government Invest in Intel? - Semiwiki

“Most companies don’t die because they are wrong; most die because they don’t commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is standing still.” Andy Grove's Only the Paranoid Survive, first published in 1996. Looking back...

semiwiki.com

It's fast and sad.

 

[tedc]

Believe this makes the US government Intel's single largest shareholder?

This will be very interesting. At least investment for MP Materials is to support a contender on the global stage. For Intel, it's putting a thumb on the scale of an industry with many existing US-based competitors. (Commerce Secretary Lutnick also mentioned any stake would be non-voting.)

Obviously the overwhelming focus is foundry... wonder if anything will change on the Product front? What milestones need to be hit before the US government exits their investment, or is this the first step to nationalization? Will be exciting to watch.

 

[Daniel Nenni]

Believe this makes the US government Intel's single largest shareholder?

This will be very interesting. At least investment for MP Materials is to support a contender on the global stage. For Intel, it's putting a thumb on the scale of an industry with many existing US-based competitors. (Commerce Secretary Lutnick also mentioned any stake would be non-voting.)

Obviously the overwhelming focus is foundry... wonder if anything will change on the Product front? What milestones need to be hit before the US government exits their investment, or is this the first step to nationalization? Will be exciting to watch.

Will the USG be considered an institutional share holder? It is a non-voting stake. If so, yes, The USG will be the largest institutional share holder. Blackrock and Vanguard will be a close 2nd and 3rd. Is Micron Next? Gotta have memory for AI.

 

[hist78]

Believe this makes the US government Intel's single largest shareholder?

This will be very interesting. At least investment for MP Materials is to support a contender on the global stage. For Intel, it's putting a thumb on the scale of an industry with many existing US-based competitors. (Commerce Secretary Lutnick also mentioned any stake would be non-voting.)

Obviously the overwhelming focus is foundry... wonder if anything will change on the Product front? What milestones need to be hit before the US government exits their investment, or is this the first step to nationalization? Will be exciting to watch.

It's a sad development, and having or not having voting rights won’t change the facts. Intel's situation is already complicated, and trying to please a 10% government shareholder, along with the politicians and politics involved, makes it even more so. Many of these challenges fall into the category of conflicts of interest. In the fast moving semiconductor industry, that only makes Intel's problems even harder to solve.

 

[Daniel Nenni]

It's a sad development, and having or not having voting rights won’t change the facts. Intel's situation is already complicated, and trying to please a 10% government shareholder, along with the politicians and politics involved, makes it even more so. Many of these challenges fall into the category of conflicts of interest. In the fast moving semiconductor industry, that only makes Intel's problems even harder to solve.

What choice do they have? I have faith in Lip-Bu as financing is certainly in his area of expertise. Same with Masayoshi San of Softbank. Intel has its back to a wall and that means Lib-Bu will have to do some very clever things so Intel can innovate their way back in business. Not everybody will agree of course but I'm not hearing other get well plans so lets trust Lip-Bu. And yes I trusted Pat Gelsinger but that was short lived and I did not know him prior to becoming Intel CEO. Let's give Lip-Bu more time, it has only been 5 months and big changes have already been made.

 

[sonchoy]

Here's Trump's tweet. From "Conflicted and Fire him" to "Highly Respected" in less than 2 weeks. "Even more incredible future" means Ohio better be built and filled with 14A.

 

[tedc]

Here's Trump's tweet. From "Conflicted and Fire him" to "Highly Respected" in less than 2 weeks. "Even more incredible future" means Ohio better be built and filled with 14A.

View attachment 3548

"The United States paid nothing for these Shares"...

That makes no sense... and it directly contradicts the Reuters article: "The government will purchase the 433.3 million shares with funding from the $5.7 billion in unpaid CHIPS Act grants and $3.2 billion awarded to Intel for the Secure Enclave program."

 

[MKWVentures]

Here's Trump's tweet. From "Conflicted and Fire him" to "Highly Respected" in less than 2 weeks. "Even more incredible future" means Ohio better be built and filled with 14A.

View attachment 3548

The US government is now a large investor in China and Vietnam.... hilarious. Hopefully those countries do not have a "cant do business with company associated with the CCP ... USA"

Intel wasnt going to get the rest of the grants since they are stopping factory building ..... so this is a pretty good deal for both.

I dont like government owned businesses but Intel is well suited to be a government company .... Intel is the Amtrack of semiconductor companies.

Somehow the US managed to lose money on the GM deal (quite shocking). This will probably make the US 10-20B in 2-3 years (especially after foundry is sold off and USG gets to buy more 5% more shares at 20)