US Government to Invest in Intel: 10% Stake Planned
Government to Acquire Stake in Intel
President Donald Trump revealed Friday that the U.S. government is planning to acquire a 10% ownership stake in Intel. This information, initially reported by Bloomberg, resulted in a surge of over 7% in the semiconductor company’s stock price. Intel has reportedly consented to this proposition.
A formal statement from Intel regarding the matter has not yet been released.
A Pivotal Moment for Intel
This development occurs during a critical period for Intel, marked by recent instability. Current CEO Lip-Bu Tan is actively engaged in restructuring the company. This includes the closure of specific divisions and workforce reductions, all aimed at concentrating on core business areas and closing the gap with competitors such as Nvidia.
Earlier this month, President Trump had publicly called for Tan’s resignation, citing potential conflicts of interest. Subsequently, Tan engaged in discussions with the President to address these concerns and explore avenues for collaboration between the company and the government.
Trump's Remarks on the Agreement
Addressing the White House press corps, Trump acknowledged his previous call for Tan to step down.
“I suggested that if the concerns were valid, resignation would be appropriate, and he came to discuss the matter with me. I found him to be quite capable,” Trump stated, as relayed in emailed comments to the press. “I believed he was, to some extent, a victim, though no one is entirely without fault. I then proposed that the United States should hold a 10% stake in Intel. He indicated a willingness to consider this. I expressed my desire for this arrangement, as Intel has fallen behind, particularly when compared to Jensen and our colleagues at Nvidia.”
Trump further elaborated, “I conveyed that I believe U.S. partnership would be beneficial, and he concurred. They have agreed to proceed, and I believe this is a favorable outcome for both parties.”
Unprecedented Government Ownership
Such direct federal government ownership in a major corporation would represent a significant deviation from established U.S. policy. Equity stakes held by the government in private companies are exceptionally rare within the U.S. and often generate controversy. Exceptions were seen during the 2008-2009 financial crisis, when temporary ownership was taken in companies like General Motors, AIG, and several major banks to avert economic collapse.
These government-held stakes were systematically sold back to private investors over the ensuing years.
Recent Investment from SoftBank
The proposed Intel deal, anticipated to be formally announced later Friday, follows a recent agreement where the Japanese conglomerate SoftBank committed to a $2 billion investment in Intel. This investment was framed as a dedication to advancements in technology and semiconductors within the U.S. Under this agreement, SoftBank will purchase Intel common stock at a price of $23 per share. Intel shares were trading at approximately $25 on Friday afternoon.
TechCrunch has contacted the White House seeking further clarification.
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