Trump Moves Forward with 10% Intel Purchase

The United States will move forward with the purchase of 10% of the American processor giant, Intel. This transaction will result from the conversion of public aid into capital and will allow the injection of approximately $10 billion (€8.5 billion) into the struggling company.

The deal was sponsored by Donald Trump, who met with Intel CEO Lip-Bu Tan this Friday. Days earlier, the US president had asked for the Intel CEO's resignation due to alleged conflicts of interest, raising suspicions of ties to Chinese companies.

Donald Trump calls for the “immediate” resignation of Intel CEO

In a statement issued after the meeting, the US president said that Tan "came in wanting to save his job and ended up giving $10 billion (in shares) to the United States. And we accepted."

The agreement between the company and the White House provides for the acquisition of 9.9% of Intel's capital at $20.47 per share, representing a 4% discount compared to the closing price this Friday. The acquisition of the 433 million shares will be financed with the $5.7 billion unpaid subsidy allocated to the company during Joe Biden's presidency under the Chips Act. The remaining $3.2 billion was allocated to Intel through the Secure Enclave program, also promoted by the previous Democratic administration.

Despite this financial boom, analysts cited by Reuters believe the amount isn't enough to lift Intel out of its financial and operational troubles. They say the company needs to find external customers for its innovative 14th-generation microprocessor, the 14A. The current CEO, who has been in office since March, had already warned that this investment will only continue if it can secure customers.

The Intel operation is yet another intervention by Trump and his administration in the business world. A recent example was the agreement with Nvidia, an Intel competitor, which opens the Chinese market to the H20 chip. In exchange, the US government will receive 15% of the revenue.

In the defense sector, the Pentagon became the largest shareholder in a small mining company, MP Materials, to increase rare earth production in the country. Another example is the "golden share," a share with preferential rights including veto rights, which was part of the deal that allowed Nippon Steel to acquire US Steel.