Trump confirmed that Intel agrees to give the U.S. a 10% stake. Quotes soared 7%

Donald Trump announced that processor manufacturer Intel has agreed to transfer 10% of its shares to the US administration. Due to this Intel's quotations soared by 7%. The transfer of a stake in Intel to the U.S. government would be a "staggering level of interference" in private business, breaking established norms, according to Bloomberg.

Processor maker Intel has agreed to a deal that would give the U.S. government 10 percent of its shares, U.S. President Donald Trump told reporters at the White House on Friday, Bloomberg reports.

"They agreed to it, and I think it's a great deal for them," Trump said in a statement from the agency.

The U.S. president described the agreement as a move that would revitalize the company, noting that "Intel has lagged behind" compared to competitors and that he proposed the idea during a meeting with Intel CEO Lip-Boo Tan earlier this month.

"And I said: "You know what? I think the United States should get 10 percent of Intel.'" And he said: "I would consider it," and I said: 'Well, I'd like you to do that,'" Trump recounted.

A formal announcement of the deal is expected later Friday, sources told Bloomberg. Intel declined to comment to the agency.

Intel shares jumped more than 7% to $25.2 on the back of Trump's statement. Compared to the beginning of the year, the company's market value is now 24% higher. For comparison, the main U.S. stock index S&P 500 added just under 10% over the same period.

Bloomberg sources first reported on August 14 that the U.S. government was considering buying a stake in Intel. A few days later, interlocutors told the publication that the U.S. government is considering converting part or all of the grants allocated to Intel under the CHIPS and Science Act into a stake in the capital. Under this law, the U.S. Department of Commerce subsidizes chipmakers developing domestic production. The total amount of these subsidies for Intel's commercial and military production is $10.9 billion - roughly what 10% of the company is worth at the chipmaker's current capitalization.

The transfer of a 10% stake in Intel to the U.S. government would be a "staggering level of interference" in private business, Bloomberg noted. It violates established norms that investors and politicians have previously considered acceptable only in emergency situations, such as war or systemic crisis, the publication added.

The White House did not specify with which other companies similar discussions may be underway. However, a Bloomberg source said that chipmakers that are increasing commitments to invest in the U.S., like Taiwan Semiconductor Manufacturing (TSMC) and Micron, would not be under similar pressure to swap equity stakes for financing, Bloomberg adds.

In August, Trump announced that major processor makers Nvidia and Advanced Micro Devices had agreed to give the U.S. government 15% of proceeds from AI chip sales to China. Prior to that, Trump secured a "golden share" in steel company U.S. Steel when it was bought by Japanese steel giant Nippon Steel. Such a share gives its owner veto power and the ability to participate in key company decisions.

This article was AI-translated and verified by a human editor