Trump Administration Seeks 10 Percent Stake In Intel: Report

The Trump administration is reportedly looking to change the terms of Intel’s U.S. CHIPS and Science Act funding agreement by turning some or all of its nearly $11 billion in federal grants into a roughly 10 percent stake in the beleaguered semiconductor giant.

After the Biden administration finalized deals last year for Intel to receive nearly $11 billion in federal funding to support its U.S. expansion plans, the Trump-led White House is reportedly looking to change the terms of those deals by turning some or all of those subsidies into a roughly 10 percent stake in the beleaguered semiconductor giant.

Citing a White House official and other anonymous sources, Bloomberg reported Monday that the Trump administration is in talks to gain an approximately 10 percent stake in Intel as part of a potential investment that “would involve converting some or all of the company’s grants from the U.S. CHIPS and Science Act into equity.”

The publication noted that the deal would make the U.S. government Intel’s largest shareholder.

The details emerged after Bloomberg reported last Thursday that Intel and the Trump administration are discussing the possibility of the U.S. government taking a stake in the Santa Clara, Calif.-based company to boost domestic manufacturing.

The discussions reportedly stemmed from Intel CEO Lip-Bu Tan’s visit with President Trump a week ago, which took place days after Trump called for Tan to resign “immediately” for allegedly being “highly conflicted.”

The White House did not respond to a request for comment.

While Intel has declined to comment on the White House’s interest in potentially acquiring a stake in the company, a company spokesperson said last Thursday that the chipmaker is “deeply committed to supporting President Trump’s efforts to strengthen U.S. technology and manufacturing leadership.”

Intel is set to receive a total of $10.86 billion in grants from the U.S. CHIPS and Science Act after the company finalized agreements with the Biden-led White House last year. These grants consisted of $7.86 billion to support Intel’s build-out of U.S. chip manufacturing and advanced packaging plants and up to $3 billion for a Pentagon-connected Secure Enclave program that is meant to help the U.S. military improve its capabilities and secure a domestic supply chain.

According to the latest Bloomberg report, a 10 percent investment in Intel would have been worth roughly $10.5 billion at the company’s market value at the time the article was published. Intel’s stock price fell after Bloomberg published the story on Monday, with the company’s shares now down by roughly 2.8 percent for the day.

Bloomberg’s sources cautioned that the deal, including how much of a stake the White House takes in Intel and whether it will proceed, is “still in flux.”

So far, Intel has received $2.2 billion of the $7.86 billion award, the company said in its quarterly filing with the U.S. Securities and Exchange Commission in late July.

In the filing, Intel admitted that there is uncertainty over whether it will continue to receive funding under the Trump administration.

“We expect to continue to benefit from government incentives, though recent U.S. government actions create uncertainty as to whether the US government will fulfill its obligation under our CHIPS Act agreements, and support future awards in the US,” it wrote.

The company said that it had not yet been reimbursed for $850 million in claims related to the CHIPS Act funding agreement at the end of the second quarter.

“To the extent we delay or cancel capital investments or otherwise are unable or fail to comply with the terms of the agreements, there may be a delay in our receipt of, or we may forfeit or be required to repay, the associated government incentives,” it added.