Intel agrees to give US a 10% stake in company, Trump says

By Michelle L Price and Michael Liedtke Associated Press WASHINGTON President Donald Trump revealed that Intel has agreed to give the U S regime a stake in its business Speaking with reporters on Friday Trump noted the deal came out of a meeting last week with Intel CEO Lip Bu Tan which came days after the president called for Tan to resign over his past ties to China I revealed I think it would be good having the United States as your partner Trump commented He agreed and they ve agreed to do it Related Articles Intel s billion rally sends valuation to dot-com levels Trump thinks owning a piece of Intel would be a good deal for the US Here s what to know US seeks Intel stake without governance rights Lutnick says Trump administration in talks to take a stake in Intel Donald Trump says Intel CEO has amazing story sets Cabinet talks The struggling Silicon Valley chipmaker has a arena cap of just over billion The agreement comes just after Japanese machinery giant SoftBank Group disclosed Monday that it is accumulating its stake in Intel The official announcement is expected to come later Friday according to a White House official who was not authorized to speak publicly ahead of an announcement and spoke on condition of anonymity What s happening The Trump administration has been in talks to secure a stake in Intel in exchange for converting regime grants that were pledged to Intel under President Joe Biden If the deal is completed the U S administration would become one of Intel s largest shareholders and blur the traditional lines separating the masses sector and private sector in a country that remains the world s largest commercial sector Why would Trump do this 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 commission on their sales of chips in China in exchange for export licenses Trump s interest in Intel is also being driven by his desire to boost chip production in the U S which has been a focal point of the agreement war that he has been waging throughout the world By lessening the country s dependence on chips manufactured overseas the president believes the U S will be better positioned to maintain its technological lead on China in the race to create artificial intelligence Didn t Trump want Intel s CEO to quit That s what the president stated August in an unequivocal post calling for Intel CEO Lip-Bu Tan to resign less than five months after the Santa Clara company hired him The demand was triggered by reports raising national prevention concerns about Tan s past investments in Chinese tech companies while he was a venture capitalist But Trump backed off after Tan professed his allegiance to the U S in a population letter to Intel employees and went to the White House to meet with the president who applauded the Intel CEO for having an amazing story Why would Intel do a deal The company isn t commenting about the possibility of the U S leadership becoming a major shareholder but Intel may have little choice because it is now dealing from a position of weakness After enjoying decades of expansion while its processors powered the personal computer boom the company fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone s debut Intel has fallen even farther behind in latest years during an artificial intelligence craze that has been a boon for Nvidia and AMD The company lost nearly billion last year and another billion in the first six months of this year prompting Tan to undertake a cost-cutting spree By the end of this year Tan expects Intel to have about workers a reduction from the end of last year Would this deal be distinctive Although rare it s not unprecedented for the U S leadership to become a considerable shareholder in a prominent company One of the greater part notable instances occurred during the Great Recession in when the administration injected nearly billion into General Motors in return for a roughly stake in the automaker at a time it was on the verge of bankruptcy The cabinet ended up with a roughly billion loss after it sold its stock in GM Would the governing body run Intel U S Commerce Secretary Howard Lutnick reported CNBC during a Tuesday interview that the governing body has no intention of meddling in Intel s business and will have its hands tied by holding non-voting shares in the company But various analysts wonder if the Trump administration s financial ties to Intel might prod more companies looking to curry favor with the president to increase their orders for the company s chips What administration grants does Intel receive 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 by the scheme The company has received about billion of the billion pledged under the incentives venture 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 bar