US Government in Talks Over Intel Stake

The US government entered talks with Intel about taking a stake in the chipmaker. The news comes shortly after President Donald Trump appeared to soften his stance on a call for CEO Lip-Bu Tan to resign immediately.

The plan came to fruition following a meeting between Trump and Tan last week, which was held to clear up concerns the White House had about the chief executive’s ties and investments in Chinese companies. Trump previously called for the immediate resignation of Tan over the issue, but seemed to have changed his mind following the meeting, indicating that his team was willing to work with the CEO.

The size of the mooted stake was not reported, but sources claim the US government is prepared to pay it directly. Details are still being sorted, and talks could end without an agreement. A deal with the US government would likely provide a boost to the development of a planned Intel factory hub in Ohio, which the chipmaker once said would become the world's largest chipmaking facility. The plan, however, faced delays.

An agreement would also give Intel a much-needed financial boost, as Tan pushes ahead with a plan to reduce its headcount by more than 20% as part of a wider cost-cutting effort. Intel did not respond to the news directly, but stated it was deeply committed to supporting the President’s efforts to strengthen US technology and manufacturing leadership. White House spokesperson Kush Desai said that the discussion about hypothetical deals should be regarded as speculation unless officially announced by the administration.