U.S Commerce Secretary Howard Lutnick has confirmed in an interview that the White House is in talks with Intel to acquire a 10% stake in the company. Lutnick confirmed this in a live interview with CNBC, saying that the government wants the grants given to the company under the CHIPS Act to be converted into equity. Secretary Lutnick also reiterated that the U.S. must manufacture its own chips domestically.
“America should get the benefit of the bargain; that is exactly Donald Trump’s perspective, which is, ‘Why are we giving a company worth $100 billion this kind of money? What are (sic) 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; get a good return for the American taxpayer, instead of just giving grants away. Donald Trump views [that] we should get benefits for the economics that we put out.”
Lutnick also highlighted the perceived security risks of relying on foreign chip production. "For national security, we must manufacture our own chips domestically," he said in the interview. "We cannot rely on Taiwan, which is 9,500 miles from the United States and only 80 miles from China. 99% of leading-edge chips should not be made in Taiwan. This is why we negotiated with South Korea and Japan to expand our chip manufacturing capacity at home."
Intel has endured a tough run since July 2024, when it released a disastrous quarterly report that resulted in a massive drop in stock price, followed by rounds of layoffs that continue to bite more than a year later. Since then, new CEO Lip-Bu Tan has been trying to turn the company around after Pat Gelsinger's surprise resignation. However, Tan is also under scrutiny after Cadence admitted to exporting chip design tools to Chinese entities that have been banned by the U.S. while he was at the helm.
President Trump went so far as to say Tan must resign because of conflicting interests. Nevertheless, the Intel CEO went to the White House to meet with the president, where the two discussed the future of the embattled American chipmaker. It was a couple of days after this meeting that reports started to surface that Trump was considering trying to secure a 10% U.S. stake in the company.
At the moment, Intel has only received $2.2 billion of the promised $7.86 billion under the CHIPS Act. It’s unclear if the government will release the remaining balance in one fell swoop if it gets the 10% equity stake, but a move like that would benefit the cash-strapped company, possibly allowing it to speed up the construction of its Ohio fab. Aside from that, Lutnick says that the proposed equity stake does not come with any governance provisions, so Intel’s board would still be in charge of the direction that the company is taking. This will not be a golden ticket for Intel, though, as it would still need a path to profitability, even if it gets the extra cash from Washington. We've reached out to Intel for comment on this latest development.
Although this move would be beneficial for Intel in the short term, a few experts are raising red flags, including one cited in the interview who said that it is “corporate statism and it rarely does end well.” Reuters also reported that Lutnick wants to expand this move — the exchange of cash grants for equity stake — to other CHIPS Act beneficiaries. This will certainly be something that companies will be wary of, as it adds several layers of complexity to the deals.
Whatever the case, a 10% non-voting, non-governance equity share for a huge inflow of capital would certainly be good news for Intel. And when you pair that with Softbank’s $2 billion purchase of Intel stock, the chipmaker is certainly getting a lot of resources to help it move forward. Now, it just needs to find customers for its 14A node.
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