Potential 10% Equity Stake in Intel by Trump Administration Through $10.9B Chips Act Conversion
The Trump administration is reportedly in talks to convert Intel’s $10.9 billion in Chips Act grants into a 10% equity stake. This move could potentially make the U.S. government the chipmaker’s largest shareholder. The conversion would be worth approximately $10.5 billion, based on Intel’s current market valuation, signifying a significant shift toward state capitalism in critical industries.
News of the potential government investment initially sparked a 23% rally in Intel shares last week, marking the company’s best weekly performance since February. However, Monday witnessed a 5% decline as investors reassessed the implications of potential government ownership.
The discussions follow a meeting between President Trump and Intel CEO Lip-Bu Tan, whom Trump had previously criticized over concerns about ties to China. Intel is the only U.S. company capable of manufacturing the most advanced semiconductors on American soil, making it strategically important for national security.
The potential stake would help fund Intel’s delayed $20 billion semiconductor manufacturing facility in Ohio, which has faced repeated postponements. This move is reminiscent of other Trump administration interventions, including:
- The Defense Department’s $400 million equity stake in rare-earth producer MP Materials Corp
- Taking a “golden share” in U.S. Steel
White House spokesman Kush Desai declined to comment on specifics, stating that no deal is official until announced by the administration.
Source: Bloomberg