US government in talks to take 10% stake in Intel through Chips Act grants, says report

The Trump administration is considering taking a 10 per cent stake in Intel by converting part of the chipmaker’s $10.9 billion Chips Act grants into equity, Bloomberg reported, citing a White House official and others familiar with the matter.

Intel shares fell about 3.7 per cent on Monday, trimming last week’s gains fuelled by expectations of federal support. The company has been allocated grants for both commercial and military chip production, an amount Bloomberg said roughly matches the cost of a potential government holding.

Reports last week suggested Washington could take a stake in Intel following a meeting between CEO Lip-Bu Tan and President Donald Trump, after Trump pressed Tan to resign over his past ties to Chinese firms.

Analysts believe government support could ease pressure on Intel’s loss-making foundry business but warn the company still struggles with a weak product pipeline and difficulties attracting customers. “The fact that the US government is stepping in to save a blue-chip American company likely means that Intel’s competitive position was much worse than what anybody feared,” said David Wagner of Aptus Capital Advisors, which holds 80,581 shares in Intel.

Wagner added that although he opposed taxpayer money being invested in private firms, it was “better than having Intel become a state-owned entity.”

Trump described his meeting with Tan as “very interesting” and has taken an unprecedented approach to corporate interventions, pushing for multibillion-dollar government tie-ups in semiconductors and rare earths. His administration has already floated deals with Nvidia and rare-earth producer MP Materials to secure control over critical supply chains.

“The US government is taking a China card here and trying to have a little more control over some of the production that these companies are having,” said Clark Geranen of CalBay Investments. While he called the move troubling from a free-market perspective, he said firms were pragmatically cooperating with Trump, expecting the policy could prove short-lived.

Washington has previously taken equity stakes in struggling companies, most notably General Motors during the 2008 financial crisis. Intel itself secured nearly $8 billion last year to build new factories in Ohio and other states, but Tan has since slowed construction, promising to expand only in line with demand — a strategy that could put him at odds with Trump’s drive to bolster domestic manufacturing.