Trump's AI Shake-Up: Intel Soars 7.7% as U.S. Moves to Dominate the Chip Wars

Intel's stock price surged 7.7% on Tuesday, July 17, 2023, following comments made by former President Donald Trump that indicated his support for the company's manufacturing efforts. Trump's bullishness on U.S. chip making bodes well for Intel's manufacturing efforts, as the company aims to become a major player in the semiconductor industry. The surge in Intel's stock price reflects investor sentiment and expectations regarding the company's future prospects under Trump's AI initiatives.



Trump's comments come at a time when the U.S. is looking to reduce its dependence on foreign chip supplies, particularly from China and Taiwan. The U.S. Department of Commerce's new framework, announced on October 2, 2024, aims to keep advanced AI models out of the hands of malicious actors while ensuring that secure and responsible foreign entities and destinations have access to the most advanced U.S. AI models and large clusters of advanced computing integrated circuits (ICs) necessary to train those models. This aligns with Trump's broader AI policy, which seeks to maintain U.S. leadership in AI while ensuring the responsible diffusion of the technology.



The surge in Intel's stock price also reflects the strong demand for the company's Gaudi 3 AI chip. Intel's Chief Technology Officer Greg Lavender reported that there is "lots of demand" for the chip, which is expected to be 50% better at inference and 40% more power-efficient than Nvidia's H100 AI chip at a fraction of the cost. Intel has already recruited impressive customers for the Gaudi 3 chips, including IBM, NielsenIQ, German conglomerate Bosch, and Bharti Airtel, a major Indian telecom company.



The potential long-term implications of Trump's AI policy on the U.S. semiconductor industry and the global chip market are significant. Increased investment in U.S. semiconductor manufacturing could help alleviate global chip shortages and reduce prices. Additionally, Trump's policy could encourage U.S. companies like Intel, AMD, and Micron to invest more in research and development, potentially narrowing the gap with foreign competitors. However, increased competition with foreign chipmakers, particularly those from China and South Korea, could also intensify.

In conclusion, Trump's AI policy, specifically his support for Intel's manufacturing efforts, aligns with the broader geopolitical landscape by addressing U.S. dependence on foreign chip manufacturing, countering China's influence, ensuring secure and responsible foreign access to advanced AI models, and addressing sustainability challenges in the semiconductor industry. The surge in Intel's stock price reflects investor sentiment and expectations regarding the company's future prospects under Trump's AI initiatives, as the company aims to become a major player in the semiconductor industry.