White House Weighs 10% Equity Stake in Chipmaker Intel
Potential deal, part of CHIPS Act funding, could make the U.S. government the company's largest shareholder.
The White House is considering a plan to take a 10% equity stake in Intel Corp., a move that would make the U.S. government the largest shareholder in the nation's most iconic chipmaker. The discussions, first reported by Bloomberg, are being held as part of the implementation of the 2022 CHIPS and Science Act, signaling a significant step toward creating government-backed champions in strategic industries.
The potential deal could see some or all of the $10.9 billion in grants awarded to Intel under the CHIPS Act converted into company equity. At Intel's current market valuation, a 10% stake would be worth approximately $10.4 billion. The move comes as Washington intensifies its efforts to revitalize the domestic semiconductor industry and reduce reliance on foreign manufacturing, particularly in advanced chip technology where Intel has lost ground to global competitors like TSMC and Samsung.
Intel's stock has been volatile on the news. After an initial report of a potential government investment sent shares rallying nearly 9% on August 14th, the stock fell over 3% following the more detailed Bloomberg report. The discussions remain fluid, and it is unclear whether the plan has gained broad traction within the administration or if the White House will proceed.
The debate over direct government intervention highlights the strategic importance of Intel to U.S. national and economic security. Once the dominant force in the industry, the company has struggled to keep pace in the artificial intelligence boom and has yet to secure a major customer for its advanced manufacturing business despite significant capital investment. Analysts are divided on the potential impact of a government stake, with some arguing it is essential for the company's revival while others contend Intel's challenges run deeper than funding.
Adding another layer to the chipmaker's evolving ownership structure, Japan's SoftBank recently invested $2 billion in the company, acquiring a roughly 2% stake and becoming its fifth-largest shareholder. The strategic investment underscores a belief in the future of advanced semiconductor manufacturing in the United States, with Intel positioned to play a critical role.