Boosting market confidence, reported talks on government investment may reshape Intel’s turnaround despite ongoing struggles in AI chips.
Intel shares rose more than 7% on Thursday after reports emerged that the US government is considering taking a stake in the struggling chipmaker. The move, if finalized, could provide Intel with crucial financial support at a time when the company is battling fierce competition and declining market value.
The reported discussions come shortly after a meeting between Intel’s chief executive Lip-Bu Tan and President Donald Trump. The US president had recently raised concerns about Tan’s past business ties with Chinese firms, calling them a potential conflict of interest. Despite the controversy, Intel remains one of the few American firms capable of producing high-end semiconductors at scale.
Once the undisputed leader in the semiconductor industry, Intel has seen its dominance wane in recent years. The company has fallen behind in the artificial intelligence (AI) chip race, where Nvidia has taken a commanding lead. Intel’s market capitalization has dropped to around $104 billion, less than half its valuation in 2020, highlighting investor concerns about its long-term prospects.
A centrepiece of Intel’s turnaround plan is its new manufacturing complex in Ohio, which had been announced with ambitions of becoming the world’s largest chip facility. However, the project has suffered repeated delays, raising doubts about the company’s ability to execute on its manufacturing roadmap. The facility is now reported to be a central point in ongoing discussions between Intel and the US government.
