Trump Administration Considering Unprecedented Investment in Intel for National Security and Tech Leadership

The United States government is reportedly contemplating an extraordinary investment in Intel, the struggling chipmaker, according to Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross. However, there appears to be some discrepancy regarding the administration’s objectives for this potential investment.

Such a move, if it materializes, would represent a unique arrangement, as it would involve the government using taxpayer funds to acquire a stake in a private American corporation.

During an interview with CNBC on Tuesday, Mnuchin hinted at the deal’s primary purpose being the strengthening of an American tech company rather than generating profits from Intel. When asked whether acquiring a stake in Intel would compel U.S. companies to purchase chips from the technology giant, Mnuchin clarified that any investment in Intel would aim to “enhance the company’s capacity for chip production within the U.S.”

“We are not seeking to pressure companies or use our stake to drum up business,” Mnuchin said, adding that such an investment would likely involve converting grants from the CHIPS and Science Act into an equity stake. Reports suggest that the administration is considering a 10% stake in Intel.

Bloomberg first reported discussions about this potential deal last week.

“There’s no intention of forcing companies to buy from Intel,” Mnuchin further stated, emphasizing concerns over the reliance on Taiwan for chip production, where most of the world’s chips are manufactured.

“For national security purposes, we need to eliminate that single point of failure,” he said.

Ross echoed these sentiments later in the morning, telling CNBC that shifting chip manufacturing from Taiwan to the United States is a priority, both economically and for security reasons. However, Ross also underscored Trump’s belief that the government should secure a return on its investment rather than providing grants to major tech companies without expecting any financial benefit.

Ross stated that under the Biden administration, through the bipartisan CHIPS act, Intel was “effectively receiving money for free.”

“Donald Trump proposes converting that into saying, ‘We want equity for our investment,'” Ross said. “America should benefit from this deal. Essentially, Trump’s perspective is: ‘Why are we giving a company worth $100 billion such substantial funding?'”

Intel declined to comment on reports of such a deal when approached by CNN last week but stated that it was “committed to supporting President Trump’s efforts to strengthen U.S. technology and manufacturing leadership.”

“We look forward to continuing our work with the Trump Administration to advance these shared priorities, but we will not comment on rumors or speculation,” an Intel spokesperson said in a statement.

White House spokesman Kush Desai stated that discussions about hypothetical deals should be considered as speculation unless officially announced by the Administration.

The reports and Mnuchin’s comments come after chipmakers Nvidia and AMD announced they would pay 15% of their chip sales in China to the government in exchange for export licenses. If the government does take a stake in Intel, it could serve as a model for other Trump administration investments, two people familiar with White House discussions on the matter told CNN last week.

President Donald Trump met with Intel CEO Bob Swan last week after calling for his resignation over allegations about his ties to China.

Intel has struggled to maintain its position in the chip market after lagging behind competitors like Qualcomm and Nvidia in the shift towards mobile and AI technology. The company announced last month that it had mostly completed plans to lay off 15% of its workforce.

Trump has advocated for reviving manufacturing in the United States and positioning America as a leader in the tech sector, two objectives that have been central to his presidency thus far. He has lauded significant investments from companies like Apple, TSMC, and Nvidia to expand their U.S. operations as political victories, although these companies had begun investing in expanding their U.S. presence prior to his second term.