Intel shares jump after report says Trump administration looking at stake

The Guardian

2 days ago

Shares in Intel have jumped 7.4% after it was reported that the Trump administration is considering taking a stake in the struggling US chipmaker.
The potential investment, which would be paid for by the US government, would be used to develop Intel's factory hub in Ohio, according to Bloomberg. It would also help shore up the chipmaker's finances at a time when Intel has been slashing jobs as part of a wider cost-cutting drive.
Talks over the potential investment stem from a meeting that took place between the US president, Donald Trump, and the Intel chief executive, Lip-Bu Tan, this week, days after Trump called for Tan to resign, accusing him of having ties to the Chinese Communist party. Bloomberg suggested Tan was likely to stay in charge of the chipmaker.
Commenting on the Bloomberg report, the White House spokesperson Kush Desai said: 'Discussion about hypothetical deals should be regarded as speculation unless officially announced by the administration.'
However, the news still sparked excitement among investors, with shares rising as much as 8.9% on Thursday before closing 7.4% higher at the end of trading at $23.86 (£17.60). That pushed the company's market value to $104.4bn.
A stake in Intel would mark the Trump administration's latest attempt to intervene in key private industry. He has repeatedly threatened to impose tariffs of up to 100% on imported semiconductors and chips, which could favour Intel as a US-based semiconductor firm.
Earlier this week, the US government announced a deal that would result in the chipmakers Nvidia and Advanced Micro Devices paying 15% of their revenues from Chinese AI chip sales to the US government. Last month, the defence department also announced it would take a $400m preferred stake in the US rare earth producer MP Materials.
However, an investment in Intel would mark a U-turn from Trump's recent aggressive rhetoric against the company's leadership.
Trump took to the Truth Social media platform on Thursday last week to allege: 'The CEO of Intel is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!'
Trump's social media outburst came shortly after the US Republican senator Tom Cotton wrote a letter to the Intel chair, Frank Yeary, over Tan's investments and ties to semiconductor companies that are reportedly linked to the CCP and the People's Liberation Army, the party's military arm.
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In April, Reuters reported that Tan had invested in hundreds of Chinese tech firms, including at least eight with links to the People's Liberation Army.
Cotton asked Intel's board if Tan had dumped his investments, and questioned Tan's previous leadership of Cadence Design Systems, a company that last month said it had sold products to China's National University of Defense Technology in violation of US export controls.
Intel said at the time its board and CEO were 'deeply committed to advancing US national and economic security interests and are making significant investments aligned with the president's America First agenda. Intel has been manufacturing in America for 56 years,' the statement said, adding that the company looked forward to its 'continued engagement with the administration'.
Intel was approached for comment.