Intel shares jump as Trump says US taking a 10% – Business News
US takes 10% stake in Intel, Trump and Lutnick announce after share price surges 5.5%
The Trump administration introduced Friday that it had taken a 10% stake in Intel, in a single of the largest authorities interventions in non-public enterprise because the Great Recession
Shares of the embattled chip maker surged 5.5% on the NASDAQ after Trump teased the acquisition within the Oval Office. The official announcement was made by Intel and Commerce Secretary Howard Lutnick after the market closed.
Intel shares soared on Friday’s announcement. Getty Images
The settlement was reached after Trump met with new Intel CEO Lip-Bu Tan earlier this month, then reversed his Aug.7 call for Tan to “resign immediately” over his alleged investments in companies with ties to the Chinese navy.
“He came in. He saw me. We talked for a while. I liked him a lot. I thought he was very good. I thought he was somewhat a victim,” Trump instructed reporters within the Oval Office. “And, I said, ‘You know what? I think the United States should be given 10% of Intel.’”
“And I said, ‘I think it would be good having the United States as your partner.’ He agreed, and they’ve agreed to do it. And I think it’s a great deal for them,” the president continued.
Trump boasted that Tan “walked in wanting to keep his job, and he ended up giving us $10 billion.”
The deal requires the US to obtain 433.3 million shares of non-voting stock priced at $20.47 apiece — a low cost from Friday’s closing price of $24.80. That unfold means the feds have already got a gain of $1.9 billion, on paper.
The US would take a 10% stake in Intel beneath a deal with the struggling chipmaker and is planning more such strikes AP
The $8.9 billion investment will likely be paid for by $5.7 billion in funding from the CHIPS and Science Act of 2022 that was accepted by the Biden administration however has but to be paid out, and $3.2 billion awarded to the company final 12 months as half of the Secure Enclave program.
Intel has already acquired $2.2 bilion in grants from the CHIPS and Science Act, for a whole investment of $11.1 billion.
Start your day with all you need to know
Morning Report delivers the most recent information, videos, photographs and more.
Thanks for signing up!
Commerce Secretary Howard Lutnick described the deal as “fair to Intel and fair to the American People,” in a post on X.
“This historic agreement strengthens US leadership in semiconductors, which will both grow our economy and help secure America’s technological edge,” Lutnick wrote.
Trump met with Intel CEO Lip-Bu Tan on Aug.11. AP
Tan, employed by Intel in March, has been tasked with turning across the troubled chipmaker, which reported an annual loss of $18.8 billion final 12 months — its first since 1986.
In a assertion, Tan applauded Trump for “driving historic investments in a vital industry” and resolved to reward his religion in Intel. “We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership,” Tan mentioned.
The company acquired a $2 billion lifeline from Japan-based SoftBank Group earlier this week, in a capital injection considered as a vote of confidence in Tan and the chipmaker’s attempt to navigate financial headwinds.
“Intel has been left behind,” Trump argued on the White House.
“Intel was the biggest, most powerful chip company in the world – and then, they started leaving and they started going to foreign countries, in particular Taiwan,” he added. Trump has beforehand pushed for multibillion-dollar authorities offers with non-public industry to secure US entry to semiconductors and uncommon earth minerals, together with with Nvidia and rare-earth producer MP Materials.
