Intel is exploring additional equity investments from major backers at discounted rates, according to people familiar with the matter. The move comes just days after the company secured a $2 billion injection from SoftBank.
Despite the boost, Intel’s stock tumbled nearly 7% on Wednesday, erasing earlier gains tied to the SoftBank deal and reports that the Trump administration may step in with its own involvement.
Government Pressure and Investor Concerns
Commerce Secretary Howard Lutnick said this week that any U.S. support from the CHIPS Act should come with an equity stake for Washington, underscoring the administration’s tougher stance on corporate accountability.
“They need money to build whatever it is that the customers may actually, ultimately want,” CNBC’s David Faber noted on-air. “And having the CHIPS Act money, which is free, so to speak, no strings attached, become equity is not helpful to them because it’s dilutive.”
Struggles in AI and Manufacturing
Intel is in the middle of a turnaround plan after years of shrinking sales and dwindling market share. The company has lagged behind rivals in capitalizing on the AI chip boom while pouring billions into its foundry business, which has yet to secure a significant customer.
Leadership has also shifted. Lip-Bu Tan took over as CEO in March after Pat Gelsinger’s ouster. Earlier this month, President Donald Trump publicly called for Tan’s resignation, labeling him “highly CONFLICTED,” though the president’s tone softened following Tan’s visit to the White House.
Author’s Opinion
Intel’s situation highlights the risks of trying to rebuild an empire in the middle of a rapidly shifting industry. Pouring money into factories without a clear pipeline of customers is dangerous, no matter how much political or corporate backing exists. Intel still has brand recognition and Washington’s attention, but if it can’t secure major AI chip orders soon, no amount of discounted equity will stop it from losing relevance in a market where speed and partnerships matter most.
Featured image credit: Morton Lin via Flickr
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