The Trump administration is in discussions to take a stake of about 10% in Intel Corp., according to a White House official and other people familiar with the matter, in a move that could see the US become the beleaguered chipmaker’s largest shareholder.
The federal government is considering a potential investment in Intel that would involve converting some or all of the company’s grants from the US Chips and Science Act into equity, said the people, who asked not to be identified because the information is confidential. Intel has been slated to receive a combined $10.9 billion in Chips Act grants for commercial and military production.
That figure is roughly enough to pay for the targeted holding. At Intel’s current market value, a 10% stake in the chipmaker would be worth roughly $10.5 billion. The exact size of the stake, as well as whether the White House chooses to move ahead with the plan, is still in flux, the people said.
Intel shares dropped as much as 5.5% after Bloomberg reported on the talks Monday. They had climbed 23% last week for their best weekly gain since February.
White House spokesman Kush Desai declined to comment on the specifics of the discussions, saying only that no deal is official until it’s announced by the administration. Intel didn’t immediately respond to a request for comment.
The White House official also floated the possibility that the administration could convert other Chips Act awards into equity stakes. It’s not clear whether that idea has gained traction broadly within the administration or whether officials have broached the possibility with any companies that could be affected.
Last month, in an unprecedented move, the Defense Department said it will take a $400 million preferred equity stake in the little-known US rare-earth producer MP Materials Corp. — a deal that would make the Pentagon the company’s largest shareholder.
News of a potential government investment in Intel kicked off a rally in the company’s shares after Bloomberg News first reported the discussions among US officials and company representatives last week.
As is the case for all Chips Act winners, Intel’s grant money was originally designed to be disbursed over time as the company hits negotiated project milestones. Intel had received $2.2 billion in grant disbursements as of January.
It’s unclear whether that $2.2 billion would be included in the possible equity stake, whether the company has received additional tranches of its award since President Donald Trump took office, and on what timeline Intel would receive money under a possible equity stake.
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