Intel Stock Surges 4% on Trump Administration's Potential Stake Acquisition

The Trump administration is reportedly exploring the possibility of using funds from the U.S. CHIPS Act to acquire a stake in Intel Corporation (INTC.US). This news has led to a nearly 4% increase in Intel's stock price, despite broader market trends. The discussions are in the early stages, with the government considering whether to convert part or all of the existing CHIPS Act funding into equity, allocate new funds, or combine CHIPS Act funds with other financing sources. Intel is already a significant beneficiary of the CHIPS Act, having received $79 billion in grants for commercial semiconductor manufacturing, $30 billion for the Department of Defense's secure supply chain program, and $110 billion in loans under the 2022 legislation. The potential funding sources and the stability of the discussions have not been previously reported.

Intel's CEO, Pat Gelsinger, met with President Donald Trump on Monday. Despite earlier criticisms from the president, Gelsinger's position is reportedly secure. The government aims to quickly deploy unused CHIPS Act funds to sectors deemed critical to U.S. national security. The White House declined to comment on the matter.

The potential investment by the Trump administration in Intel is part of a broader strategy to bolster the U.S. semiconductor industry. The CHIPS Act, enacted in 2022, seeks to enhance domestic semiconductor manufacturing and research, reduce dependence on foreign suppliers, and bolster national security. By acquiring a stake in Intel, the government could exert more influence over the company's strategic decisions and ensure that investments align with national priorities.

Intel, a leading global semiconductor manufacturer, faces fierce competition from rivals. The company has been investing heavily in research and development to maintain its technological edge and expand its market share. However, the semiconductor industry is capital-intensive, and Intel has been seeking additional funding for its growth initiatives. The potential investment by the Trump administration could provide Intel with the financial resources needed to accelerate innovation and expand production capacity, helping it better compete with rivals and maintain its leadership position in the global semiconductor market. However, the details of the proposed investment have not been disclosed, and it remains uncertain whether the discussions will lead to a formal agreement.