U.S. Government Targets Equity in Intel: A Bold Move in Semiconductor Strategy

The U.S. government seeks a 10% equity stake in Intel in exchange for $7.9 billion in grants, a novel approach in stabilizing the chipmaker. Officials emphasize that this does not equate to control over Intel's operations. The grant-to-equity proposal underscores a strategic move to bolster domestic chip production.

The U.S. government is pursuing a groundbreaking strategy by seeking a 10% equity stake in Intel in exchange for significant cash grants approved under the administration of former President Joe Biden. Commerce Secretary Howard Lutnick announced the innovative approach aimed at helping Intel stabilize amid financial struggles.

In a conversation with CNBC, Treasury Secretary Scott Bessent elaborated on the proposal, indicating plans to convert grants into equity to secure Intel's chip production capabilities in the U.S. White House Press Secretary Karoline Leavitt emphasized the national security and economic dimensions of this initiative, describing it as unprecedented.

Bessent clarified that the government's ambition is not to control Intel but to secure a return on investment. This strategic move deviates from previous practices, reflecting a paradigm shift in U.S. policy toward incentivizing domestic semiconductor manufacturing.

(With inputs from agencies.)