Intel stock rises as Trump says chipmaker has agreed to sell stake to government

Intel's stock experienced a notable increase of approximately 6% on Friday after reports emerged from Bloomberg regarding a potential government investment in the company. According to President Donald Trump, the U.S. government is considering acquiring a 10% equity stake in the chipmaker, which currently boasts a market capitalization exceeding $100 billion. Trump expressed optimism about the deal, stating, "They've agreed to do it and I think it's a great deal for them," during a briefing at the White House. However, a White House official later informed CNBC that discussions with Intel are ongoing, and no formal agreement has been finalized. Intel's CEO, Lip-Bu Tan, is scheduled to meet with Trump later today to further discuss the potential deal. The proposed investment represents a significant shift in U.S. industrial policy, with the government aiming to play a more proactive role in corporate America. Commerce Secretary Howard Lutnick indicated that the government seeks an equity stake in Intel in exchange for financial support under the CHIPS Act. He stated, "We should get an equity stake for our money," during his appearance on CNBC's "Squawk on the Street." Lutnick clarified that any government stake would be nonvoting. Earlier this week, Intel also announced a $2 billion investment from SoftBank, which equates to around 2% of the company. As the only American firm capable of producing cutting-edge chips domestically, Intel faces stiff competition from Taiwan Semiconductor Manufacturing Company, which provides chips for major players like Apple and Nvidia. Intel has committed substantial resources towards establishing chip factories in Ohio, a region it has dubbed the "Silicon Heartland." These facilities are intended to produce advanced chips, including those for AI applications. However, in a memo to employees in July, Tan cautioned that the company would not be issuing "blank checks" and would evaluate the pace of construction based on market conditions. Currently, operations at Intel's Ohio factory are projected to commence in 2030. Last fall, Intel secured nearly $8 billion in grants under the CHIPS and Science Act to support its expansion efforts, which were initiated during the Biden administration.