The U.S. government may take a stake in Intel

The U.S. government is discussing whether it will take a stake in beleaguered chipmaker Intel Corp. as a way to bail it out of its financial struggles, according to a report.

Bloomberg reported that the two sides were in discussions, but nothing has been decided: not when or even if it could happen, nor the amount of equity Intel would give up or what terms would be attached to the agreement.

What does appear to be clear, however, is that the U.S. government is at least talking about taking a direct stake in Intel, which would be a first for the company.

In May, the Saudi national AI company Humain — a company funded by the sovereign wealth fund of Saudia Arabia — formed a joint venture with rival AMD with no direct investment. Saudi Arabia formed a Public Investment Fund (PIF) for those investments. Mubadala Investment Company, one of Abu Dhabi’s sovereign wealth funds, made an initial investment of $622 million in AMD in 2007 but has since sold its entire stake.

The U.S. does not have a direct equivalent to the PIF, though President Trump proposed forming one in February. It’s not clear whether such a fund could be authorized and put to use in this scenario.

Bloomberg pointed out that the U.S. Department of Defense took a $400 million preferred equity stake in MP Materials Corp., a producer of rare earths — a deal that would make the Pentagon the company’s largest shareholder and set a precedent for how the government could interact with private companies.

Regardless, the talks apparently are a direct consequence of a meeting between Intel chief executive Lip-Bu Tan and Trump at the White House. Trump had called for Tan to step down, citing Tan’s role as a venture capitalist and his relationships with numerous Chinese companies, some with alleged links to the Chinese government. Doing business with China has always been a sensitive issue for U.S. companies, though Nvidia and AMD both agreed to hand over 15 percent of their revenues from AI chips sold to Chinese companies to allow both to do business there.

A day after meeting with Tan, however, Trump praised Tan on Truth Social, calling him and his rise an “amazing story.”

Intel’s struggles are well known, as the company has weathered layoffs of thousands of employees over the past nine months or so. Intel has cancelled overseas projects and delayed the development of a fab in Ohio, which was supposed to have been funded in part by the U.S. Chips and Science Act. Craig Barrett, Intel’s former CEO, has also called for a bailout — though by Intel’s customers, not the government.

Updated at 2:34 PM with additional detail.