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The Trump administration is in talks with Intel to have the U.S. government potentially take a stake in the struggling chipmaker, Bloomberg News reported on Thursday, citing people familiar with the plan.
Intel's shares surged over 7 per cent in regular trading and then another 2.6 per cent after the bell.
The plan stems from a meeting this week between President Donald Trump and Intel CEO Lip-Bu Tan, according to the report.
The meeting came days after Trump publicly demanded the resignation of Tan over his investments in Chinese tech companies, some linked to the Chinese military.
Intel declined to comment on the report but said it was deeply committed to supporting President Trump's efforts to strengthen U.S. technology and manufacturing leadership.
"Discussion about hypothetical deals should be regarded as speculation unless officially announced by the administration," said White House spokesman Kush Desai.
The details of the stake and price are still being discussed, according to the report.
Any agreement and potential cash infusion will help the years-long efforts to turn around the company's fortunes. Once the undisputed leader in chip manufacturing, Intel has lost its position in recent years.
The chipmaker's stock market value has plummeted to $104 billion from $288 billion in 2020.
Intel's profit margins - once the envy of the industry - are also at about half their historical highs.
Tan has been tasked to undo years of missteps that left Intel struggling to make inroads in the booming AI chip industry dominated by Nvidia, while investment-heavy contract manufacturing ambitions led to heavy losses.
Any agreement would likely help Intel build out its planned chip complex in Ohio, Bloomberg reported.
Intel's planned $28 billion chip fabrication plants in Ohio have been delayed, with the first unit now slated for completion in 2030 and operations to begin between 2030 and 2031, pushing the timeline back by at least five years.
National Security
Taking a stake in Intel would mark the latest move by Trump, a Republican, to deepen the government's involvement in the U.S. chip industry, seen as a vital security interest to the country.
Earlier this week, Trump made a deal with Nvidia to pay the U.S. government a cut of its sales in exchange for resuming exports of banned AI chips to China.