The Trump administration is exploring options to acquire about 10% of Intel Corp (INTC.US) through funds from the Chip and Science Act, a move that could make the U.S. government the largest shareholder of the troubled chipmaker. According to White House officials and people familiar with the matter, the federal government is considering converting the "Chip Act" funds originally allocated in installments into equity investments, and the amount involved may cover Intel's approved $10.9 billion in commercial and military production subsidies.

However, just as the Trump administration is planning to invest in Intel, Japan's SoftBank has already taken the lead - a US$2 billion investment agreement has been finalized.

Based on the current market value, 10% of the equity is worth approximately US$10.5 billion, which partially overlaps with the US$2.2 billion in initial funding Intel has received. The specific operational details and timetable have not yet been clarified. White House spokesman Khush Desai declined to comment on the details of the negotiations, stressing only that "no agreement is final until it is officially announced." The U.S. Department of Commerce, which oversees the Chip Act, also did not comment, and Intel did not respond to a request for comment.


People familiar with the matter added that the possibility of converting other CHIP Act awards into equity is also being discussed within the government, but there are still questions about whether the idea has broad support and whether it has been communicated to companies in advance. It is worth noting that the "Chip Act" funds were originally planned to be released in installments based on project milestones. After being converted into equity, the funding period may be shortened.

The background of this negotiation is complicated: After the Trump administration took office, Intel fell behind Asian manufacturers such as Taiwan Semiconductor Manufacturing Company (TSM.US) in technology and became a key lever for the United States to revive its domestic chip manufacturing industry. Although TSMC and Samsung have expanded U.S. investment, getting local companies to produce cutting-edge chips has remained a priority for both administrations.

The Biden administration has previously discussed options such as the merger of Intel and GlobalFoundries (GFS.US), and the Trump team has discussed the possibility of taking over Intel factories with TSMC, but no substantial progress has been made. The idea of ​​introducing UAE capital has also been proposed internally, but the current progress is unknown.

If the equity acquisition plan proceeds, it will continue the Trump administration’s recent pattern of increasing intervention in strategic areas. Previously, the team had strengthened its control by requiring semiconductor companies to share 15% of their sales to China and obtaining "golden shares" of U.S. Steel.

This idea echoes the Pentagon’s announcement last month to acquire 15% of the preferred shares of MP Materials Rare Earth Company, highlighting Washington’s tendency to deploy capital in key industrial chains.

It is worth mentioning that while the Trump administration is exploring investment in Intel, Japan's SoftBank Group has reached an agreement to inject US$2 billion into the US chip manufacturer. Under the terms of the definitive securities purchase agreement, SoftBank will directly purchase shares of Intel common stock at a price of $23 per share, subject to customary closing conditions.

SoftBank Chairman and CEO Masayoshi Son said the investment demonstrates the company's determination to "promote U.S. technology and manufacturing leadership." Intel CEO Chen Liwu emphasized that he and Sun Zhengyi have maintained close cooperation for decades and thanked him for showing his confidence in Intel through this investment.

Currently, Intel is facing the dual pressure of stagnant sales and continued losses. New CEO Chen Liwu is trying to reverse the decline through cost cutting and layoffs. Although news of government investment had driven Intel's stock price to its largest weekly gain since February, its stock price fell more than 3% on Monday due to reports related to equity negotiations. However, after SoftBank announced a US$2 billion investment agreement, Intel's stock price has risen by more than 5% after hours as of press time.