Category: 3. Business

Officials in US President Donald Trump’s administration made comments saying the equity stake was not to run the firm.

United States Commerce Secretary Howard Lutnick has said the US government wants an equity stake in Intel in exchange for cash grants approved during the administration of former President Joe Biden.

Separately, also on Tuesday, Treasury Secretary Scott Bessent said any US investment in Intel would be aimed at helping the troubled chipmaker stabilise.

Asked about reports that the US was considering taking a 10 percent stake in Intel, Bessent told CNBC’s “Squawk Box” programme: “The stake would be a conversion of the grants and maybe increase the investment into Intel to help stabilise the company for chip production here in the US.”

Bessent gave no details about the size or timing of any US stake in Intel, but said any investment would not be aimed at forcing US companies to buy chips from Intel.

Bessent’s comments were the first official response from the Trump administration after Bloomberg News reported on Monday that the US government is in talks to take a 10 percent Intel stake in exchange for $7.9bn in grants that were approved for the US chip company during the Biden administration.

‘Not governance’

“We should get an equity stake for our money,” Lutnick told CNBC. “We’ll get equity in return for that … instead of just giving grants away.”

Lutnick said the US does not want control of the company.

“It’s not governance, we are just converting what was a grant under Biden into equity for the Trump administration for the American people.” He suggested any stake would be “non-voting,” meaning it would not enable the US government to tell the company how to run its business.

He made his comments a day after SoftBank Group agreed to invest $2bn into the chipmaker, which has struggled to compete after years of management blunders.

“The Biden administration literally was giving Intel money for free and giving TSMC money for free, and all these companies just giving the money for free, and Donald Trump turned it into saying, ‘Hey, we want equity for the money. If we’re going to give you the money, we want a piece of the action for the American taxpayer,’” Lutnick said.

Intel and TSMC, a Taiwan-based chipmaker, did not immediately comment.

Intel helped launch Silicon Valley, but has fallen behind rivals like Nvidia Corp and Advanced Micro Devices Inc and is shedding thousands of workers and slashing costs under its new CEO, Lip-Bu Tan. It recorded an annual loss of $18.8bn in 2024, its first such loss since 1986.

Intel plans to end the year with 75,000 “core” workers, excluding subsidiaries, through layoffs and attrition, down from 99,500 core employees at the end of 2024. The company previously announced a 15 percent workforce reduction.

Trump recently said Tan, who was made CEO in March, should resign. But after meeting with him last week, Trump relented, saying Tan had an “amazing story”.

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The transport secretary, Heidi Alexander, has expressed “serious concerns” about Citroën’s handling of a safety recall that has left thousands of Britons unable to drive their cars.

In June the car brand’s parent company, Stellantis, issued an immediate and rare “stop-drive” order for certain models because of a potentially fatal airbag safety fault.

The safety alert impacted owners of its Citroën and DS Automobiles-branded cars, with 120,000 vehicles affected in the UK.

In the letter to Eurig Druce, UK group managing director of Stellantis, Alexander said that the “level of disruption experienced by UK motorists – particularly the most vulnerable – is unacceptable”.

Alexander urged the company to take “immediate steps” to improve the recall process. This meant ensuring all affected owners are “provided with viable alternatives”, whether through courtesy cars, financial compensation or at-home repairs.

In the letter, first reported by the PA news agency, the minister said the existing arrangements were “not meeting expectations”. She had received reports from MPs and their constituents that detailed distressing experiences and inadequate support with alternative transport arrangements.

The consumer group Which? recently described Stellantis’s handling of the recall as “chaotic”. It said it had heard from “many distressed drivers” – including a woman caring for her terminally ill husband who needed to get to hospital appointments – who were incurring significant expenses for hire cars, taxis or insurance fees.

While Stellantis had promised to minimise the burden on consumers the “execution of this recall has exposed significant gaps in customer support and transparency”, Alexander said.

Cars equipped with Takata airbags are being recalled because chemicals in the inflators may deteriorate over time, which could cause the bag to rupture.

No incidents have been reported in the UK, but Stellantis issued the stop-drive order across Europe after a woman in France was killed when her airbag exploded.

Driving a car with a stop-drive recall can invalidate your insurance, and it is illegal for a private seller to sell a car with a recall without disclosing it first.

Stellantis insisted that Citroën was “fully engaged” in maximising the daily number of cars that can have their airbags replaced, adding that its Peugeot network is now authorised to also carry out the work.

To date more than 72,000 vehicles have had replacement airbags fitted and Stellantis expects the majority of vehicles to be repaired by the end of September, with any remaining cases handled within weeks.

Stellantis explained that with such a large number of vehicles affected it was “inevitable” that customers could be inconvenienced in the short term.

“For each and every customer, we discuss options to support mobility. These options include replacement airbags at a dealership or at home, a courtesy car, support for other mobility options and recovery. We give priority to those with the most urgent needs.”

getty

‘Mistakes are piling up’

The US government is pursuing a stake in Intel, the US commerce secretary said on Tuesday, confirming reports of discussions between officials and the company that have circulated for the better part of a week.

The Trump administration wants to convert funding from the Chips and Science Act, which funds research and manufacturing of semiconductor chips in the US, into equity in the struggling tech company, according to Howard Lutnick.

Intel was once a leader in producing computer processors, but is now seen as a laggard behind the likes of Nvidia, which last month became the first public company in history to scale a $4tn valuation after a stratospheric stock market rise.

Lutnick criticized the structure of the Chips Act, signed into law in 2022 under Joe Biden.

“Why are we giving a company worth $100bn 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 told the CNBC financial news network. “So we’ll deliver the money which was already committed under the Biden administration, we’ll get equity in return for it.”

Shares in Intel rallied 7.5% in New York.

The conversion of the funding would not confer governing rights typical of a company’s largest shareholder to the federal government, according to Lutnick. “It’s not governance, we’re just converting what was a grant under Biden into equity. Non-voting,” he said.

Lutnick did say the goal of the equity stake would be much the same as that of the Chips Act, bluntly stating: “We need to make our own chips here. We cannot rely on Taiwan.”

A large portion of the world’s semiconductors originate from Taiwan Semiconductor Manufacturing Company (TSMC), based in the city of Hsinchu. TSMC has also received Chips Act funding to build semiconductor manufacturing facilities in the US, with construction beginning in Arizona.

The US treasury secretary, Scott Bessent, also said on Tuesday that a potential stake would not oblige US businesses to purchase Intel chips.

“The last thing we’re going to do is take a stake and then try to drum up business,” he told CNBC. “The stake would be a conversion of the grants and maybe increase the investment into Intel to help stabilize the company for chip production here in the US. There’s no talk of trying to force companies to buy from Intel.”

The prospect of large US investment in Intel has reinvigorated investor interest in the company, whose stock value has declined by half over the past five years. Shares jumped last week after initial reports of discussions with the US government, and the Japanese conglomerate Softbank announced late on Monday that it would take a $2bn stake in the company.