U.S. Hunts for Stake in Intel amid Chipmaker's Struggles
The U.S. government seeks an equity stake in Intel in exchange for financial grants. Secretary Lutnick emphasizes the move is to stabilize the company amid financial struggles. Treasury Secretary Bessent assures it’s not to influence Intel's business operations. This shift marks a change from the previous grant-only approach.
On Tuesday, U.S. Commerce Secretary Howard Lutnick announced that the government is seeking an equity stake in Intel, trading it for cash grants previously approved under former President Joe Biden's administration. This initiative aims to aid the struggling chipmaker's stabilization efforts amid ongoing financial challenges.
In a CNBC interview, Treasury Secretary Scott Bessent affirmed that the proposed stake converts grants into potential investment, addressing recent reports that highlighted a government interest in a 10% slice of Intel. While no precise details were provided on the stake's timing or magnitude, Bessent clarified the intention is not to coerce U.S. companies into purchasing Intel chips.
Bloomberg revealed discussions regarding a $7.9 billion grant exchange for equity, marking a shift from the prior administration's strategy. Lutnick reiterated that the equity move would not interfere with Intel's governance. This adjustment, following a $2 billion investment from SoftBank Group, symbolizes heightened government engagement in the embattled chip sector.
(With inputs from agencies.)
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