Commerce Secretary Confirms Plans for Chip Investment
On Tuesday, Commerce Secretary Howard Lutnick announced the government’s intention to acquire 10% of Inter’s shares in exchange for $8 billion in chip law funds that the Biden administration has approved.
Lutnick emphasized that this investment would benefit struggling chip manufacturers. “We need to get equity stakes for the money,” he told CNBC’s “Squawk on the Street.”
“We’re delivering funds that were already committed under the Biden administration. We’ll seek value in return,” he added, clarifying that the government doesn’t aim to take control of the company.
His remarks come on the heels of reports indicating President Trump is also interested in a 10% stake in Inter.
According to White House press secretary Carolyn Leavitt, “The president is focused on prioritizing America’s needs, from both a national security and economic viewpoint. It’s a creative idea that hasn’t been tried before,” referencing Lutnick’s efforts regarding the deal.
Inter did not provide any comments on the situation.
Intel’s stock saw a 7% increase as the government anticipates aiding chip manufacturers with this initiative. Treasury Secretary Scott Bescent noted that this interest serves as a subsidy conversion that could bolster investment in Intel and stabilize its production capacity.
Additionally, SoftBank announced it would invest $2 billion in Intel, making it the fifth largest shareholder, as reported by FactSet. Intel has been granted $8.5 billion through the Chips Act funding, aimed at producing microchips for defense and intelligence sectors.
While that figure got trimmed to roughly $7.85 billion, Intel remains one of the top recipients of federal funding in the sector. Meanwhile, Taiwanese semiconductor companies have received $6.6 billion to enhance their chip production in Arizona.
Lutnick remarked, “The Biden administration has literally given Intel and TSMC money for free. All these companies are getting free funding,” during an appearance on “Squawk Box.”
Intel CEO Lip-Bu Tan recently met with Trump at the White House amid ongoing scrutiny regarding his business relationships with China. Following some controversies, Trump had previously urged Tan to “resign immediately” after receiving correspondence from Senator Tom Cotton (R-Ark.) asking for details on the CEO’s business dealings.
Tan, who took over leadership of Intel earlier this year after the company underwent significant layoffs and reported disappointing revenues, has faced challenges as Intel disclosed an annual loss of $18.8 billion for 2024—its first loss since 1986.
The Trump administration continues to navigate intricate interactions with U.S. tech firms, including NVIDIA, which has been suggested to restrict certain sales of advanced chips to Chinese clients.
Last month, it was revealed that the Department of Defense might become the biggest shareholder in efforts to enhance rare earth magnet production as part of a substantial government deal.
