Commerce Secretary Howard Lutnick has confirmed investment talks between the government and Intel $INTC, adding that the U.S. wants an equity stake in return for grant funding, in a move that could open the door for similar deals with other chipmakers.
Lutnick said Tuesday that the state would not have voting rights in the company. “It’s not governance, we’re just converting what was a grant under Biden into equity,” he said in a CNBC interview. “Non-voting.”
“Why are we giving a company worth $100 billion this kind of money? What is in it for the American taxpayer? And the answer Donald Trump has is we should get an equity stake for our money,” he added. “So we’ll deliver the money which was already committed under the Biden administration, we’ll get equity in return for it.”
Lutnick was referring to grants allocated to the company under the U.S. bipartisan Chips and Science Act into equity. Intel was handed a combined $10.9 billion in grants under the act for commercial and military manufacturing, which former President Joe Biden signed into law in 2022.
Intel shares jumped on Tuesday following the news, pushing its market value to around $111 billion. If the stake were worth the entirety of the grant funding, it would equate to a little less than 10% of the company as of Aug.19.
The potential investment, first reported last week, would support Intel’s plans to build a factory hub in Ohio and would come at a time when Intel has been slashing jobs as part of a cost-cutting drive, having fallen behind rivals like Nvidia $NVDA and Taiwan Semiconductor Manufacturing (TSMC $TSM) in the global AI chipmaking race.
A stake in Intel would be President Donald Trump’s latest try at intervening in the chipmaking industry. The move to try to secure a stake in return for grant funding could even indicate a willingness to do the same with other chipmakers who are in line for grants.
“Imagine this: the Biden administration was literally giving Intel — for free, and giving TSMC money for free and all these companies just giving them money for free,” Lutnick said.
“Donald Trump turns that into saying, ‘Hey, we want equity for the money,’” the secretary continued. “How could that not be smarter, better and more important for the American taxpayer than just free money?”
Intel is seen by many as the best chance for the U.S. to compete with global rivals. However, it has struggled amid stagnant sales and ongoing losses in recent years. Already under Tan it has announced plans to lay off 20% of its staff to pare back bureaucracy within the company.
“We need to make our own chips here. We cannot rely on Taiwan,” Lutnick said.
Separately on Tuesday, Nvidia is reportedly working on a new AI chip for China that is more powerful than its H20 chip that it currently sells to the country. The new product is tentatively called the B30A, Reuters reported, citing people familiar, and it is thought to be based on Nvidia’s Blackwell chip architecture.
When asked about the new chip, Lutnick did not rule out allowing Nvidia’s chief executive Jensen Huang to sell the more powerful product to China. “Of course, he would like to sell a new chip to China,” Lutnick said. “I’ve listened to him pitch the president, and the president listens to our great technology companies, and he’ll decide how he wants to play.”
Last week, the U.S. government announced a deal that would have Nvidia and another chipmaker, Advanced Micro Devices, pay 15% of their revenues from sales in China.
The White House, Intel and Nvidia did not immediately respond to Quartz’s requests for comment.