Less than two weeks after President Donald Trump called for the ouster of Intel Corp.’s Lip-Bu Tan, the company’s chief executive officer has a shot at securing billions of dollars in fresh capital that could help him turn around the troubled US chipmaker.
The Trump administration is in discussions to take a stake of about 10% in Intel, possibly by converting grants made to the company under the US Chips and Science Act into equity. That could allow Intel to tap about $10 billion in capital as Tan works out a strategy for revival.
In another surprise, SoftBank Group Corp. agreed to take a $2 billion stake in Intel, as the Japanese company seeks a broader role in the artificial intelligence boom. Founder Masayoshi Son already owns a majority stake in chipmaker Arm Holdings Plc and has laid plans to compete with Nvidia Corp. in AI chips. Intel’s chipmaking skills could help SoftBank manufacture chips to run — and possibly train — AI models like ChatGPT.
Dan Ives, Global Head of Technology Research at Wedbush Securities, shares his thoughts on the future of Intel.
Commerce Secretary Howard Lutnick confirmed discussions between the US and Intel Corp. for the government to take a stake in the chipmaker, casting the plan as a bid to convert Chips and Science Act grants into equity.
Lutnick on Tuesday said the plan would not give the US governance or voting rights in the company, even though it could make the federal government Intel’s largest shareholder. He assailed the chips law signed by former President Joe Biden for giving semiconductor manufacturers subsidies without any return for US taxpayers.
“It’s not governance, we’re just converting what was a grant under Biden into equity,” Lutnick said in a CNBC interview. “Non-voting.”
Bloomberg News previously reported that the Trump administration has discussed taking about 10% of the beleaguered chipmaker, as SoftBank Group Corp. announced a surprise bet on Intel’s revival by agreeing to acquire a $2 billion stake in the company.
Intel rose as much as 11% in New York trading on Tuesday, while SoftBank fell 4% in Tokyo.
“Why are we giving a company worth $100 billion this kind of money? What is in it for the American taxpayer? And the answer Donald Trump has is we should get an equity stake for our money,” Lutnick said. “So we’ll deliver the money which was already committed under the Biden administration, we’ll get equity in return for it.”
The discussions underway with Intel would mark a sea change in US policy toward semiconductors. The arrangement, if finalized, could potentially lay the groundwork for similar agreements with other chipmakers.
“Imagine this: the Biden administration was literally giving Intel — for free, and giving TSMC money for free and all these companies just giving them money for free,” Lutnick said, referring to Taiwan Semiconductor Manufacturing Co., another major chipmaker.
“Donald Trump turns that into saying, ‘Hey, we want equity for the money,’” the secretary continued. “How could that not be smarter, better and more important for the American taxpayer than just free money?”
Lutnick said the US wants to reshore some chipmaking for national security purposes.
“We need to make our own chips here. We cannot rely on Taiwan,” he said.
At the same time, Lutnick did not rule out allowing Nvidia Corp. to sell a new artificial intelligence chip it is developing for the Chinese market. Reuters reported the semiconductor would be based on its Blackwell architecture and more powerful than the H20 model it’s currently allowed to export there.
“Of course, he would like to sell a new chip to China,” Lutnick said, referring to Nvidia Chief Executive Officer Jensen Huang. “I’ve listened to him pitch the president, and the president listens to our great technology companies, and he’ll decide how he wants to play.”
Trump last week signaled he was open to allowing Nvidia to sell a scaled-back version of its Blackwell model to China. The administration hammered out an unusual deal with Nvidia and Advanced Micro Devices Inc. to pay the government 15% of revenue tied to Chinese chip sales.
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