Intel confirmed late Friday that the company is giving the Trump Administration U.S. government a stake in the chip giant.
Intel announced that the U.S. government will make an $8.9 billion investment in Intel common stock. The equity stake will be funded by $5.7 billion in grants that had been awarded to Intel but not yet paid. Intel has received $2.2 billion in grants under the U.S. Chips and Science Act. The government equity stake will also be funded by $3.2 billion awarded to Intel as part of the Secure Enclave Program.
"Intel is excited to welcome the United States of America as a shareholder, helping to create the most advanced chips in the world," Commerce Secretary Howard Lutnick said in a statement. "As more companies look to invest in America, this administration remains committed to reinforcing our country's dominance in artificial intelligence while strengthening our national security."
Intel Chief Executive Lip-Bu Tan said the company is "grateful for the confidence the president and the administration have placed in Intel."
Intel stock rallied after Bloomberg reported that President Donald Trump said the company has agreed to give the U.S. government a 10% stake in the chipmaker.
The shares gained 5.5% to close at 24.80. Intel stock slipped a fraction in extended trading.
The news marks another twist in what's been a tumultuous period for Intel. Once the most dominant chipmaker in the world, the Silicon Valley giant has fallen behind rivals led by Nvidia and Advanced Micro Devices, especially in AI.
Then there's Trump whose recent pronouncements have rattled investors.
Two weeks ago, he said Intel Chief Executive Lip-Bu Tan must resign, accusing him of being conflicted. The news sent Intel stock tumbling.
Last week, Intel shares rallied on news that Trump wanted to take a stake in the company. The Trump Administration reportedly is interested in converting some or all of the grants Intel received through the U.S. Chips and Science Act into equity.
Intel stock also rose after the company announced a $2 billion investment by SoftBank.
Intel stock has been advancing on the news developments and speculation. But the stock's rating has remained low, with a Relative Strength rating of 62, according to IBD MarketSurge.
