The U.S. government plans to acquire a 10% stake in Intel, a move President Donald Trump said Intel agreed to and which lifted the company's stock by more than 7%. Intel is undergoing restructuring under CEO Lip-Bu Tan, including shuttering divisions and layoffs to refocus on core businesses and close gaps with rivals such as Nvidia. Trump previously pushed Tan to resign over perceived conflicts of interest, and Tan subsequently met with Trump to explore cooperation between the company and government. The transaction follows a $2 billion SoftBank investment and was expected to be announced later 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. 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.
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.
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