August 16 (V7N) — Intel’s stock surged nearly 4 percent on Friday, driven by growing speculation that the U.S. government may take a stake in the struggling chipmaker. The movement follows a Bloomberg report indicating such discussions.

This news comes on the heels of a Monday meeting between Intel CEO Lip-Bu Tan and President Donald Trump, which followed Trump’s public demands for Tan’s resignation due to “highly conflicted” ties with Chinese firms. Trump described the meeting as “very interesting” as he continues to pursue novel forms of government intervention—most notably through a deal making the Department of Defense the majority shareholder in rare-earth miner MP Materials.

According to Bloomberg, the administration is exploring the use of funds from the 2022 CHIPS Act—introduced under President Joe Biden—to take a stake in Intel. Last year, Intel received nearly $8 billion in subsidies through the act to develop factories in Ohio and other states. However, under Tan’s leadership, the company has scaled back such plans, opting to expand based on market demand—a shift that may diverge from Trump’s manufacturing-first agenda.

Neither Intel nor the White House responded to Reuters’ request for comment.

Analysts say federal backing could provide Intel with more breathing room to overhaul its faltering foundry business. However, concerns remain over its delayed and underperforming product roadmap, diminished market share in PCs and data centers, and challenges in attracting customers to new facilities. Still, a government bailout—if confirmed—could be transformative.

Summary Table:

Issue Details
Market Reaction Intel shares rose nearly 4 percent
Government Involvement Possible U.S. government investment via CHIPS Act funds
CEO Meeting Lip-Bu Tan met with President Trump amid concerns over his Chinese links
Strategic Shift Plans for new U.S. factories scaled back; now demand-driven
Challenges Weak process technology, production defects, and competition from TSMC, AMD

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