Intel stock jumps 7% as Trump administration weighs taking stake in company
President Donald Trump wants more chips and high-tech products made in the U.S. The government's stake would help fund Intel's factories currently being built in Ohio. Intel CEO Lip-Bu Tan met Trump at the White House earlier this week, after Trump had called for Tan to resign because of alleged ties to China, according to the reports.
Intel said Tan is 'deeply committed to advancing U.S. national and economic security interests'. Intel declined to comment on the government stake rumors, saying they do not comment on speculation. Tan became Intel's CEO earlier this year after the company lost market share in artificial intelligence chips and was spending heavily on its foundry business, which makes chips for other companies, as reported by CNBC.Intel's foundry business has not yet secured a major customer, which is needed to expand and attract more business. In July, Tan said Intel would cancel manufacturing sites in Germany and Poland and slow down development in Ohio. Spending at the company would be closely watched.
ALSO READ: Shocking decline of a Silicon Valley icon: Inside Intel's 20-year slide, and the case that could change all
Under Trump, the U.S. government has started directly involving itself in big industries, like taking 15% of certain Nvidia and AMD chip sales to China and buying a $400 million stake in rare-earth miner MP Materials. The government also took a 'golden share' in U.S. Steel to allow Nippon Steel to buy the company, as per the report by Bloomberg.
Intel shares are up 19% this year, after losing 60% of their value in 2024, its worst year ever. Bloomberg reported that the potential U.S. government stake in Intel would support Intel's Ohio factory hub, which was delayed multiple times and planned to be the world's largest chip facility, as per reports.The exact size of the government stake is not clear and the plans are still fluid. After the Bloomberg report, Intel shares rose as much as 8.9% to $24.20 in New York. Intel said it is 'deeply committed to supporting President Trump's efforts to strengthen U.S. technology and manufacturing leadership'.Any deal would help Intel financially while it cuts spending and jobs, and it likely means Tan will stay as CEO despite Trump's earlier criticism. This move is part of Trump's wider effort to boost U.S. companies in key industries, including chips and steel, to compete with China.
ALSO READ: Ex-Intel boss pushes shocking $40 billion rescue plan involving Apple, Nvidia - calls for sacking Lip-Bu Tan
Intel has struggled in recent years due to lost market share and technological challenges. Tan's predecessor, Pat Gelsinger, had promoted the Ohio factory plan as a comeback. Intel's Ohio project was delayed to the 2030s, and the company is now slowing it down further while focusing on financial stability. Intel was expected to benefit from the 2022 Chips and Science Act, but that program is uncertain under Trump, as mentioned by reports.Earlier this year, officials suggested that TSMC might operate Intel's factories as a joint venture, but TSMC CEO C.C. Wei said his company will focus on its own business. Ohio is a key political state: Trump has won it in three elections, Republicans flipped a Senate seat in 2024, and former Democratic Senator Sherrod Brown is running again, as stated by Bloomberg.Q1: Why is the US government planning to take a stake in Intel?
The US government may take a stake in Intel to support its Ohio factories and boost chip manufacturing in the U.S.
Q2: Who is Intel CEO and why is he in the news?
Intel CEO is Lip-Bu Tan; he met President Trump after Trump asked for his resignation over alleged China ties, and he is now leading Intel's financial and factory plans.
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