Quick overview

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The Trump administration is negotiating the purchase of roughly a 10% stake in Intel. This move could make the United States the largest shareholder in the struggling chipmaker

Sources who wished to remain anonymous due to confidentiality claims that the government is considering investing in Intel, which could involve converting some or all of the US Chips and Science Act grants the company has received into equity.

Intel has been allocated a total of $10.9 billion in Chips Act grants for both commercial and military production.

The targeted stake could be paid for with that amount, with a 10% share valued at about $10.5 billion based on Intel’s current market value. There is still uncertainty about the exact stakes and whether the White House will proceed with the plan, according to the sources. Following Monday’s Bloomberg report on negotiations, Intel’s stock fell as much as 5 percent. However, last week, the company’s stock saw its biggest weekly gain since February, rising 23%.

The administration may also convert other Chips Act awards into equity stakes, the White House official hinted. It remains unclear if officials have discussed this idea with any affected companies or if it has gained support within the administration.

The Defense Department announced it would acquire a $400 million preferred equity stake in the relatively obscure US rare-earth manufacturer MP Materials Corp., an unprecedented move that would make the Pentagon the largest shareholder in the company.