Intel's stock experienced a surge of over 7% on Thursday after reports emerged that the Trump administration is considering acquiring a stake in the chip manufacturer.
The potential agreement is believed to bolster the company's initiative to develop a manufacturing facility in Ohio, as reported by Bloomberg, although the specifics regarding the size of the investment remain unclear.
A spokesperson for the White House, Kush Desai, stated that "talks about hypothetical arrangements should be seen as mere speculation unless officially confirmed by the administration."
This news follows a recent meeting between Intel CEO Lip-Bu Tan and President Donald Trump, who had previously stated that Mr. Tan is "highly conflicted" due to his past associations with China.
The BBC has reached out to Intel for its input.
According to Bloomberg, the company's representative refrained from commenting on the negotiations, emphasizing that Intel is "strongly committed to aiding President Trump's endeavors to bolster US technology and manufacturing leadership."
The specifics regarding the investment and its price remain under discussion, the report noted.
Analyst David Nicholson from The Futurum Group described the reported move as a "lifeline" for Intel, providing the company with both funding and governmental backing.
The well-established chipmaker has faced difficulties in recent times, having lost its competitive edge in the AI sector to rival Nvidia. Intel's market valuation has dropped to $104 billion (£77bn) since 2020, more than a 50% decrease.
The potential deal would reflect a deeper "interconnection" between the government and private enterprises in the US, mirroring trends witnessed in countries like China, noted Mr. Nicholson in his conversation with the BBC.
Recently, chip giants Nvidia and AMD agreed to remit 15% of their Chinese revenues to the US government, demonstrating another example of the Trump administration's direct involvement in the private sector.
"Some people may perceive it as unfair that Intel is receiving support, but the majority will see it as strategically critical for the US," remarked Mr. Nicholson.
The proposed factory in Ohio, which is viewed as a central element of discussions with Washington, has been regarded as vital to the company’s future.
Initially, Intel aimed to create the largest chip manufacturing complex in the world, although its progress has faced multiple setbacks.
While it is unusual for the US government to provide direct assistance to a specific corporation, supporting Intel might be a "special case," considering the significant implications for America's chipmaking capabilities, according to tech analyst Austin Lyons.
Intel stands as the US's best opportunity to compete against global competitors like TSMC and Samsung, and the Ohio facility would guarantee that the nation can produce high-end semiconductors domestically, he clarified.
Mr. Tan, an American venture capitalist who became Intel's CEO in March, has concentrated on stabilizing the company’s finances while striving to catch up in the flourishing AI chip market.
In a social media message last week, Trump called for Mr. Tan to step down, seemingly referencing his supposed investments in firms that the US claims are linked to the Chinese military.
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