Intel’s turnaround effort has finally come to the front door of Silicon Valley’s most powerful customer: Apple.

The struggling chipmaker has held several rounds of talks with the iPhone maker about a potential investment, according to people familiar with the matter and reporting by The New York Times, among other major outlets. The discussions, which took place both before and after the U.S. government bought an almost $9 billion stake in Intel last month, may or may not lead to a deal — but they do point to how urgently Intel has been looking for lifelines.

Neither Intel nor Apple has confirmed the talks. Still, hope flared on Wall Street, with shares of Intel rising about 2% heading into Thursday’s market open. For institutional and individual investors, the all-important question is whether Apple sees Intel as a bet worth making — or one too risky to touch.

Old flames

Intel and Apple have a historic relationship. Intel used to be a primary supplier for Mac computers, and the two companies codeveloped Thunderbolt technology. But their arrangement began to wane in 2020, and was finally phased out as of 2023. Apple, which currently relies on TSMC to manufacture its custom chips, has in recent years resisted shifting production to Intel because of the lag in its technology.

Once the dominant name in chips, Intel has missed major waves of innovation, from smartphones to AI. As rivals like Taiwan Semiconductor Manufacturing and Nvidia pull ahead, Intel has struggled to produce the most advanced chips and attract customers to its manufacturing business.

Now, in an effort to raise cash to fund its turnaround, Intel has been courting healthy, wealthy partners.

In recent weeks it secured $5 billion from Nvidia, along with a promise to co-develop a new AI chip, and $2 billion from SoftBank, majority owner of the chip designer Arm. The U.S. government’s purchase of Intel shares was its most dramatic intervention in a company since the 2008 auto bailouts. It's helped fuel a 50%-plus rise in Intel’s stock price since August.

U.S. government’s role

The U.S. government, led by Commerce Secretary Howard Lutnick, has been pushing for alliances that would shore up Intel as the last American manufacturer of cutting-edge chips. The same reasoning was behind the government’s recent taking of a $9 billion stake.

“This historic agreement strengthens U.S. leadership in semiconductors, which will both grow our economy and help secure America’s technological edge,” Lutnick wrote on X at the time of the announcement. In recent years, chips have increasingly come to be seen to be a national security interest as well as a key economic pillar in that they allow for development of market-leading AI, among other tech initiatives.