President Trump said that Intel agreed to give the US government a 10% stake in its business.
Speaking with reporters on Friday, Mr. Trump said the deal came out of a meeting with Intel’s CEO Lip Boo Tan last week – a few days after the President called a tan to resign his last relationship by the President.
“I said, I think it would be good as a partner of the United States,” said Mr. Trump. “He agreed, and they agreed to do it.”
One in Social media post Friday afternoon, Commerce Secretary Howard Lutnik indicated that the deal was finalized, but did not detailed.
“The United States of America now accounts for 10% of Intel, one of our great American technology companies,” Lutnik wrote. “This historical agreement strengthens American leadership in semi -circulars, which will increase our economy and help secure America’s technical growth.”
Lutnik also thanked Tan “for a deal that is appropriate for Intel and fair for American people.”
The struggling Silicon Valley Chipmaker has a market cap of over 100 billion dollars. The Japanese technology giant SoftBank Group on Monday tied up after disclosing that it was submitting its 2% stake in Intel.
The Trump administration is negotiating to secure a 10% stake in Intel in exchange for changing government grants pledging for Intel under the former President Joe Biden. With a 10% stake, the US government will become one of Intel’s largest shareholders and will stain traditional lines separating the public sector and private sector in a country which remains the world’s largest economy.
Intel confirmed the deal in a news release on Friday evening, stating that the US government would “invest $ 8.9 billion in Intel Common Stock, which shows the belief that the administration is in Intel to pursue the major national priorities of the administration and a seriously important role plays the company to expand the domestic semiconductor industry.”
Intel said that the government’s equity stake would be funded by $ 5.7 billion in already awarded grants, but has not yet been paid, the company will be awarded $ 3.2 billion as part of Intel under the US Chips and Science Act and as part of the Secure Enclave program under the US Chips and Science Act. “
Intel said that under the terms of the deal, the government agreed to buy 433.3 million primary shares of Intel Stock, which was worth $ 20.47 per share, or equal to 9.9% stake in the company.
One in Truth social post On Friday evening, Mr. Trump wrote that “it was a great honor to report that the United States is now a fully owner and controls 10% of Intel’s 10%.”
Trump said that the US “did not give anything for these shares, and the value of the shares is now about 11 billion dollars.”
Why did Trump want this deal?
In his second term, Mr. Trump Taking advantage of your power To resume operation of major computer chip companies. The administration requires Nvidia and advanced micro devices, two companies whose chips are helping to provide electricity to the craze around Artificial Intelligence, to pay 15% commission on their sale of chips in China in exchange for export licenses.
Mr. Trump’s interest in Intel is also inspired by his desire to promote chip production in the US, which has been a focal point of trade war that he is fighting worldwide. By reducing the country’s dependence on chips created abroad, the President believes that America will be better to maintain its technical lead over China in the race to create artificial intelligence.
earlier this month, The President called for the resignation of Tan After less than five months of Santa Clara, California, the company hired her. The demand started with a report to increase national security concerns about the previous investments of TAN in Chinese technology companies, while he was an enterprise capitalist.
But Mr. Trump returned Tan after Tan accepted his loyalty to America In a public letter Intel went to the White House for employees and to meet the President, who praised Intel’s CEO for being a “amazing story”.
After enjoying decades of development, while its processor operated a personal computer boom, the company fell into a recession after the iPhone recalls the change in the mobile computing era from the beginning of 2007.
Intel has lagged behind during an artificial intelligence craze in recent years which has been a boon for Nvidia and AMD. The company lost another $ 19 billion last year and another $ 3.7 billion in the first six months of this year, motivating Tan to cut the cost. By the end of this year, Tan hopes that Intel will have around 75,000 workers, which is a reduction of 25% from the end of the previous year.
Has the US government done something before?
However, it is not unprecedented for the rare, US government to become an important shareholder in a major company. One of the most notable examples during the Great slowdown in 2008, when the government injected about $ 50 billion into General Motors in exchange for about 60% stake in the automaker, it was on the verge of bankruptcy. The government suffered a loss of about $ 10 billion after selling its stock in GM.
Lutnik told CNBC during an interview on Tuesday that the government had no intention of focusing in Intel’s business, and it would be tied to it by holding non-votes shares in the company. But some analysts surprise whether financial relations for the Intel of Trump Administration may seek more companies to do with the President to increase their orders for the company’s chips.
But some analysts surprise whether financial relations for the Intel of Trump Administration may seek more companies to do with the President to increase their orders for the company’s chips.
Does Intel receive federal grant?
Intel Biden was one of the biggest beneficiaries of the administration’s Chips and Science Act, but is not able to revive its fate Falling back Born by the program on construction projects.
The company received a pledge of $ 7.8 billion $ 2.2 billion under the incentive program.
