Commerce Secretary Lutnick says Intel needs to give government stake for CHIPS funding | Latest Tech News
Commerce Secretary Howard Lutnick on Tuesday confirmed that the government needs Intel to cough up a 10% equity stake in exchange for practically $8 billion in CHIPS Act funding authorised by the Biden administration.
Lutnick said the the stake can be a return on its “investment” in the struggling chipmaker.
“We should get an equity stake for our money,” Lutnick told CNBC’s “Squawk on the Street.”
Commerce Secretary Howard Lutnick during a tv interview at the White House in July. AP
“So we’ll deliver the money, which was already committed under the Biden administration. We’ll get equity in return for it.”
The government doesn’t need control of the company, he added.
Lutnick’s feedback got here on the heels of a report Monday that President Trump was looking for a 10% stake in the company.
“The president wants to put America’s needs first, both from a national security and economic perspective, and it’s a creative idea that has never been done before,” White House Press Secretary Karoline Leavitt said Tuesday in confirming that Lutnick was working on a deal.
Intel declined to remark.
Shares of Intel jumped 7% on the prospect of the government bailing out the chipmaker.
“The stake would be a conversion of the grants and maybe increase the investment into Intel to help stabilize the company for chip production here,” Treasury Secretary Scott Bessent told CNBC.
On Monday, Japanese firm SoftBank announced it might invest $2 billion in Intel, making it the fifth-largest shareholder, according to FactSet.
Intel was awarded $8.5 billion in CHIPS Act funding under the Secure Enclave program, a national security initiative to make microchips for protection and intelligence functions.
Intel CEO Lip-Bu Tan delivers a speech at an exhibition in Taiwan in May. AP
It was later slashed by more than $600 million to about $7.85 billion, but Intel still tops the listing as one of the businesses receiving the most federal funding.
Taiwan Semiconductor Manufacturing Company has also been awarded $6.6 billion to enhance chip manufacturing at its Arizona amenities.
“The Biden administration literally was giving Intel money for free, and giving TSMC money for free, and all these companies just giving them money for free,” Lutnick told “Squawk Box.”
Intel CEO Lip-Bu Tan met with Trump at the White House last week to clear the air over accusations of having financial ties to China.
Intel slowed its construction and now expects its first manufacturing unit to start operations in 2030. Getty Images
Trump had initially called on Tan to “resign immediately” following a letter from Sen. Tom Cotton (R-Ark.) to Intel’s board requesting info on the CEO’s business dealings.
Tan, who was born in Malaysia and grew up in Singapore, took the helm at Intel in March after the software program giant ousted Pat Gelsinger following dismal earnings and a number of rounds of layoffs.
Intel has struggled financially in latest months and recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986.
The Trump administration has been making a collection of strikes involving US firms, including proposing to permit Nvidia to promote its H20 chips to China in exchange for the government receiving 15% of the company’s gross sales of some superior chips to Chinese companies and offering a related deal with Nvidia’s smaller rival AMD.
MP Materials said last month that the Defense Department will turn out to be its largest shareholder as half of a multibillion-dollar deal with the government to enhance output of uncommon earth magnets.
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