US government to acquire 10% of chipmaker Intel.

US Secretary of Commerce Howard Lutnick announced on Friday that the US government will acquire a 10% stake in US chipmaker Intel. The deal was disclosed by President Donald Trump, who described it as favorable. Shares of Intel surged more than 5% following the news.

Intel confirmed that the US government will invest $8.9 billion in Intel common stock. The funds will be sourced from previously allocated but unpaid grants, including those designated under the US CHIPS and Science Act passed during President Joe Biden's administration.

Intel CEO Lip-Bu Tan expressed the company's commitment to American-made advanced technologies. He praised President Trump's focus on US chip manufacturing, which has led to significant investments in the industry.

The CHIPS Act, aimed at bringing chip manufacturing back to the US, was passed to address the decline in Intel's chip capacity compared to competitors like Nvidia. Intel has faced challenges in capitalizing on mobile technology and artificial intelligence, areas where Nvidia has excelled.

President Trump had criticized Mr. Tan, accusing him of ties to Chinese companies linked to the military. Mr. Tan, a US citizen, refuted the allegations, stating he always operated ethically. The Trump administration's move to acquire a stake in Intel is seen as a novel approach to advancing US economic and national security interests.

The deal mirrors past government interventions in companies like General Motors during the 2008 financial crisis. Analysts note similarities between the equity stake in Intel and previous government actions to support key industries.