After SoftBank's $2 billion bet, US eyes 10% stake in Intel by converting CHIPS Act grants into equity

US Commerce Secretary Howard Lutnick on Tuesday confirmed that the Trump administration is in talks to acquire a 10% stake in Intel, a move that would make the government one of the chipmaker’s largest shareholders.

The investment, Lutnick said in a CNBC interview, would be funded by converting federal grants pledged under President Joe Biden’s 2022 CHIPS and Science Act into Intel shares.

“We think America should get the benefit of the bargain,” Lutnick said.

The unusual proposal underscores how President Donald Trump, now in his second term, is seeking to deepen US influence in strategic chipmaking even as Intel struggles to regain ground lost to rivals Nvidia, Taiwan’s TSMC and Samsung Electronics.

The confirmation comes on the heels of SoftBank Group disclosing a $2 billion investment in Intel, buying a 2% stake at $23 per share.

Intel stock jumped nearly 7% to $25.32 in Tuesday afternoon trading on news of both SoftBank’s purchase and the government’s potential deal.

SoftBank chairman Masayoshi Son called semiconductors “the foundation of every industry” and said Intel would play a “critical role” in expanding US chipmaking.

Intel has been under pressure after years of manufacturing delays and missteps. Its new chief executive, Lip-Bu Tan, appointed in March, has embarked on cost-cutting and slowed construction of a long-delayed Ohio fab.

The company’s market value of about $110 billion remains more than 60% below its dot-com era peak.

Trump met with Tan last week, days after calling for his resignation over investments in Chinese technology firms. The president has since praised Tan’s career and said he, Lutnick and Treasury Secretary Scott Bessent would continue discussions with Intel CEO.

The government’s talks with Intel come as the administration seeks to boost domestic semiconductor output while tightening export rules. Trump has imposed a 15% commission on Nvidia and AMD’s chip sales to China as a condition for export licenses, a measure expected to generate billions in US revenue.

Lutnick said any Intel stake would likely be in the form of non-voting shares to avoid direct government control.

Intel has so far received $2.2 billion of the $7.8 billion it was awarded under the CHIPS Act, aid Lutnick criticised as a “giveaway” that would deliver greater taxpayer value if converted to equity.