Commerce Secretary Howard Lutnick on Tuesday confirmed that the government wants Intel to cough up a 10% equity stake in exchange for nearly $8 billion in CHIPS Act funding approved by the Biden administration.
Lutnick said the the stake would be a return on its “investment” in the struggling chipmaker.
“We should get an equity stake for our money,” Lutnick told CNBC’s “Squawk on the Street.”
“So we’ll deliver the money, which was already committed under the Biden administration. We’ll get equity in return for it.”
The government does not want control of the company, he added.
Lutnick’s comments came on the heels of a report Monday that President Trump was seeking a 10% stake in the company.
“The president wants to put America’s needs first, both from a national security and economic perspective, and it’s a creative idea that has never been done before,” White House Press Secretary Karoline Leavitt said Tuesday in confirming that Lutnick was working on a deal.
Intel declined to comment.
Shares of Intel jumped 7% on the prospect of the government bailing out the chipmaker.
“The stake would be a conversion of the grants and maybe increase the investment into Intel to help stabilize the company for chip production here,” Treasury Secretary Scott Bessent told CNBC.
On Monday, Japanese firm SoftBank announced it would invest $2 billion in Intel, making it the fifth-largest shareholder, according to FactSet.
Intel was awarded $8.5 billion in CHIPS Act funding under the Secure Enclave program, a national security initiative to make microchips for defense and intelligence applications.
It was later slashed by more than $600 million to about $7.85 billion, but Intel still tops the list as one of the companies receiving the most federal funding.
Taiwan Semiconductor Manufacturing Company has also been awarded $6.6 billion to boost chip production at its Arizona facilities.
“The Biden administration literally was giving Intel money for free, and giving TSMC money for free, and all these companies just giving them money for free,” Lutnick told “Squawk Box.”
Intel CEO Lip-Bu Tan met with Trump at the White House last week to clear the air over accusations of having financial ties to China.
Trump had initially called on Tan to “resign immediately” following a letter from Sen. Tom Cotton (R-Ark.) to Intel’s board requesting information on the CEO’s business dealings.
Tan, who was born in Malaysia and grew up in Singapore, took the helm at Intel in March after the software giant ousted Pat Gelsinger following dismal earnings and several rounds of layoffs.
Intel has struggled financially in recent months and recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986.
The Trump administration has been making a series of moves involving US companies, including proposing to allow Nvidia to sell its H20 chips to China in exchange for the government receiving 15% of the company’s sales of some advanced chips to Chinese businesses and offering a similar deal with Nvidia’s smaller rival AMD.
MP Materials said last month that the Defense Department will become its largest shareholder as part of a multibillion-dollar deal with the government to boost output of rare earth magnets.
