U.S. government plans to take a 10% stake in Intel

The U.S. government plans to take a 10% stake in Intel, President Donald Trump told reporters Friday. Bloomberg was first to report the news, which pushed the semiconductor chip company’s stock up more than 7%. Trump said Intel has agreed to the proposal.

Intel declined to comment.

The news comes during a pivotal — and recently volatile — time for Intel. CEO Lip-Bu Tan is currently restructuring the chipmaker, shuttering certain divisions and laying off workers in a bid to focus on its core businesses and catch up to rivals like Nvidia.

Earlier this month, Trump pushed Tan to resign because of perceived conflicts of interest. Tan later met with Trump to find out a way to assuage the president and figure out ways for the company and government to work together.

While speaking to the White House press pool, Trump acknowledged the resignation push.

“I said well if that’s right he should resign and he came in and he saw me we talked for a while. I liked him a lot.,” Trump said according to emailed comments from the press pool. “I thought he was very good. I thought he was somewhat a victim but you know nobody’s a total victim I guess, and I said, you know what, I think the United States should be given 10% of Intel. And he said, I would consider that. I said, well, I’d like you to do that because Intel’s been left behind as, you know, compared to Jensen. And some of our friends Nvidia.”

Trump continued, “I said I think it would be good having the United States as your partner. He agreed. And they’ve agreed to do it and I think it’s a great deal for them and I think it’s a great deal.” 

Such federal government ownership of a major corporation would mark a dramatic departure from longstanding U.S. policy. Government equity stakes in private companies are extremely rare in the U.S. and highly controversial, with notable exceptions occurring during the 2008-2009 financial crisis when the government took temporary ownership stakes in companies like General Motors, AIG, and a few major banks to prevent economic collapse.

The government systematically sold those stakes back to private investors over the following several years.

The Intel deal, which is expected to be announced later Friday, comes days after the Japanese conglomerate SoftBank agreed to make a $2 billion investment in Intel. That deal was couched as a commitment to advanced technology and semiconductors in the U.S.. Under that agreement, SoftBank agreed to buy Intel common stock at $23 per share. Intel shares were trading around $25 on Friday afternoon.

TechCrunch has reached out White House for comment.