Trump in talks for government to take 10% stake in Intel: What we know

What’s happening?

Why would Trump do this?

Didn’t Trump want Intel’s CEO to quit?

Why would Intel do a deal?

Would this deal be unusual?

Would the government run Intel?

What government grants does Intel receive?

President Donald Trump wants the U.S. government to own a piece of Intel, less than two weeks after demanding the Silicon Valley pioneer dump the CEO that was hired to turn around the slumping chipmaker. If the goal is realized, the investment would deepen the Trump administration’s involvement in the computer industry as the president ramps up the pressure for more U.S. companies to manufacture products domestically instead of relying on overseas suppliers.

The Trump administration is in talks to secure a 10% stake in Intel in exchange for converting government grants that were pledged to Intel under President Joe Biden. If the deal is completed, the U.S. government would become one of Intel’s largest shareholders and blur the traditional lines separating the public sector and private sector in a country that remains the world’s largest economy.

In his second term, Trump has been leveraging his power to reprogram the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are helping to power the craze around artificial intelligence, to pay a 15% commission on their sales of chips in China in exchange for export licenses.

Trump’s interest in Intel is also being driven

That’s what the president said August 7 in an unequivocal post calling for Intel CEO Lip-Bu Tan to resign less than five months after the Santa Clara, California, company hired him. The demand was triggered

The company isn’t commenting about the possibility of the U.S. government becoming a major shareholder, but Intel may have little choice because it is currently dealing from a position of weakness. After enjoying decades of growth while its processors powered the personal computer boom, the company fell into a slump after missing the shift to the mobile computing era unleashed

Intel has fallen even farther behind in recent years during an artificial intelligence craze that has been a boon for Nvidia and AMD. The company lost nearly $19 billion last year and another $3.7 billion in the first six months of this year, prompting Tan to undertake a cost-cutting spree.

Although rare, it’s not unprecedented for the U.S. government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM.

U.S. Commerce Secretary Howard Lutnick told CNBC during a Tuesday interview that the government has no intention of meddling in Intel’s business, and will have its hands tied

Intel was among the biggest beneficiaries of the Biden administration’s CHIPS and Science Act, but it hasn’t been able to revive its fortunes while falling behind on construction projects spawned

The company has received about $2.2 billion of the $7.8 billion pledged under the incentives program — money that Lutnick derided as a “giveaway” that would better serve U.S. taxpayers if it’s turned into Intel stock. “We think America should get the benefit of the bargain,” Lutnick told CNBC. “It’s obvious that it’s the right move to make.”