The Trump administration is considering acquiring a 10% stake in Intel, which could make it the largest shareholder; Intel briefly fell by 5.5%

According to media reports, a White House official and other informed sources revealed that the Trump administration is discussing investing in Intel by acquiring approximately 10% of its shares, which could make the U.S. government the largest shareholder of Intel.

These sources told the media that the U.S. federal government is considering a potential investment in Intel by converting some or all of the grants the company receives under the CHIPS and Science Act into equity. Intel is set to receive approximately $10.9 billion in subsidies from the CHIPS and Science Act for commercial and military purposes.

Media reports indicate that this amount is roughly sufficient to cover the funding needed for the target equity. Based on Intel's current market value, approximately 10% of the shares is worth about $10.5 billion. However, these sources told the media that the specific scale of the shareholding and whether the White House will advance the plan are still subject to change.

After media reports on the progress of negotiations on Monday, Intel's stock price experienced volatility, initially dropping by 5.5%, before narrowing the decline to 0.5%, but then fell over 3.6% again around midday. The stock had previously recorded its best weekly gain since February, rising a total of 23%.

A White House spokesperson declined to comment on the details of the negotiations, stating only that no transaction is official until the government makes a formal announcement.

The White House official also mentioned that the government may convert grants from other chip-related legislation into equity. It is unclear whether this idea has been widely circulated within the government or if it has been discussed with potentially affected companies.

Trump Meets with Chen Liwu to Discuss Deal, Intel May Gain Breathing Room

Media reports previously indicated that in the context of Trump requesting the resignation of Intel's new CEO Chen Liwu, the two held a meeting, after which the government may consider acquiring shares in Intel. Intel's stock price began to rise. Trump had previously stated that his meeting with Chen Liwu was "very interesting."

Like all recipients of the CHIPS Act, Intel's subsidy funds are designed to be disbursed gradually as the company meets project milestone negotiations. As of January this year, the company had received $2.2 billion in grants.

It is currently unclear whether this $2.2 billion will be included in the potential equity, nor is it clear whether the company has received additional grants since Trump took office, or what timeline Intel would receive the corresponding funds under the potential equity arrangement.

Analysts indicate that federal funding support could provide Intel with more breathing room in revitalizing its loss-making foundry business, but the company still faces challenges such as a weak product roadmap and difficulty attracting customers.

Trump has been pushing for the government to reach multi-billion dollar collaborations with the semiconductor and rare earth industries, including arrangements for "pay-for-partnership" with Nvidia. Last month, the U.S. Department of Defense made an unprecedented move by acquiring $400 million in preferred stock in the little-known U.S. rare earth producer MP Materials Corp., making the Department of Defense the largest shareholder of the companyIntel received nearly $8 billion in subsidies last year, making it one of the companies that received the most funding under the CHIPS and Science Act. At that time, former CEO Pat Gelsinger bet on building new factories in Ohio and other locations to restore the company's manufacturing advantage.

However, Chen Liwu scaled back these plans and slowed construction in Ohio. He plans to build new factories based on market demand for services, while analysts point out that this approach may conflict with Trump's strong push to revitalize American manufacturing