President Trump said on Friday that Intel, the troubled Silicon Valley chipmaker, had agreed to give the U.S. government a 10 percent stake in its business, worth $10 billion, in what would be among the largest government interventions in a U.S. company since the rescue of the auto industry after the 2008 financial crisis.
Speaking at a news conference, Mr. Trump said the agreement came out of negotiations last week with Lip-Bu Tan, Intel’s chief executive.
“I said, ‘I think it would be good having the United States as your partner.’ He agreed, and they’ve agreed to do it,” Mr. Trump said. “And I think it’s a great deal for them.”
A Trump administration official said a deal had been reached and that an announcement was expected later on Friday with further details. The administration is acquiring the stake by converting cash that Intel received in recent federal grants into equity, one person briefed on the situation said. The government will not obtain governance or a board seat as part of the deal, that person said.
Intel declined to comment. Bloomberg earlier reported the deal. Shares of Intel rose more than 6 percent on the news.
Mr. Trump had called for Mr. Tan’s resignation in a social media post earlier this month. Days later, Mr. Tan met with Mr. Trump at the White House and discussed giving the U.S. government an equity stake in the chipmaker.
“He walked in wanting to keep his job, and he ended up giving us $10 billion for the United States,” Mr. Trump said.
On Friday, Mr. Trump didn’t provide specifics about how the deal would work. A deal is likely to need approval by Intel’s board of directors. It could also face a challenge from shareholders or others concerned about its legality.
If the deal happens, it would be perhaps the most notable government intervention in a U.S. company since 2008. To prevent the collapse of Chrysler and General Motors after the financial crisis that year, the government poured tens of billions of dollars into the companies and helped them reorganize. The maneuver is believed to have saved more than a million auto industry jobs.
The Trump administration has taken an interventionist approach with private companies, but especially with semiconductor makers, which produce the foundational components that act as the brains of computers and are used in cars, toasters and weapons. He has threatened to take away government grants from chip companies, restricted billions of dollars in sales, warned of high tariffs on chips made outside the United States and demanded investments.
Earlier this year, Mr. Trump expressed dissatisfaction with the CHIPS and Science Act, the 2022 bipartisan bill that President Joseph R. Biden Jr. signed into law, which created $50 billion in funding to rebuild the U.S. semiconductor industry. Over the past 50 years, production of chips has shifted to Asia, with many being produced in Taiwan, a self-governing island that faces the threat of a Chinese takeover.
Mr. Trump said he wanted to “get rid of the CHIP Act.” Since then, his administration has pressured chipmakers to increase their U.S. investments to receive some $36 billion in grants promised by the Biden administration.
Intel received $10.86 billion in such funding, including $3 billion to produce chips for the Defense Department and $7.86 billion for projects in Arizona, New Mexico, Ohio and Oregon.
The Biden administration had debated how heavily to subsidize Intel, seeing it as an important American company but a troubled one. Shortly after the company received its $7.86 billion federal grant, it fired its chief executive, Pat Gelsinger. Intel had missed the boom in artificial intelligence chips and was struggling to develop a new chip-making process.
In March, Intel hired Mr. Tan, a well-regarded semiconductor investor and manager, to fix the business. Mr. Tan outlined a plan to cut staff, develop a new A.I. strategy and focus on finding customers for a future iteration of Intel’s chip-making technology.
This month, Mr. Trump called on Mr. Tan to resign, citing the executive’s investments in Chinese semiconductor companies. That led to their meeting at the White House last week where discussions began about a government equity stake.
At the same time Mr. Trump pressured Mr. Tan, the administration was withholding some of Intel’s federal grants, according to the company’s financial filings. Intel, which had received about $2 billion of the money it was awarded, said in a filing in June that it had submitted a request for an additional $850 million in reimbursements that it had not received.
It’s unclear whether Intel’s shareholders will object to a U.S. deal. Having the government be an investor in Intel could add to the perception that the company is too big to fail. The investment will likely raise questions about whether Mr. Trump and other U.S. officials could ultimately play a role in pressuring other companies to become Intel customers.
A government stake may not solve Intel’s problems. The company’s manufacturing business has struggled to find customers. To make the investment work, the Trump administration would need to lean on companies like Apple, Nvidia and Qualcomm to buy from Intel, analysts and industry advisers said.
“Once the government becomes a stakeholder, the question is: What will they do to protect their investments?” said Ben Bajarin, principal analyst at Creative Strategies, a tech research firm. “You don’t want to force companies to choose Intel. You want them to willingly choose to use Intel, but you made need to create incentives like tax breaks.”
Tripp Mickle reports on Apple and Silicon Valley for The Times and is based in San Francisco. His focus on Apple includes product launches, manufacturing issues and political challenges. He also writes about trends across the tech industry, including layoffs, generative A.I. and robot taxis.
Lauren Hirsch is a Times reporter who covers deals and dealmakers in Wall Street and Washington.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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