Chipmaker Intel seems to be in some really hot water as it is turning over every stone for equity. Intel is in talks with other large investors to receive an equity infusion at a discounted price, people familiar with the matter told CNBC’s David Faber.
Commerce Secretary Howard Lutnick told CNBC on Tuesday that the U.S. government must receive an equity stake in Intel in exchange for CHIPS Act funds.
Sources told Faber that the chipmaker is now looking beyond SoftBank for an equity boost.
“They need money to build whatever it is that the customers may actually, ultimately want,” Faber said on CNBC’s “Squawk on the Street.” “And having the CHIPS Act money, which is free, so to speak, no strings attached, becomes equity is not helpful to them because it’s dilutive.”
READ: Former Intel engineer Varun Gupta leaks trade secrets to Microsoft yet avoids prison (
Intel stock slid nearly 7% on Wednesday, more than erasing its gains from earlier this week. The stock initially surged as investors responded to Intel’s announcement of a $2 billion capital injection from SoftBank and reports that the Trump administration is weighing different ways to get involved with the company.
Intel is undergoing a dramatic transformation in 2025 as it struggles to regain competitiveness in the global semiconductor market. Under the new leadership of CEO Lip-Bu Tan, Intel has initiated an aggressive turnaround strategy following consecutive quarters of weak performance and declining market share. This includes cutting thousands of jobs, shutting down non-core operations like its automotive chip division, delaying costly factory builds, and spinning off smaller business units.
Amid this financial turbulence, Intel is urgently seeking equity investment to stabilize its balance sheet and fund its manufacturing ambitions, especially in the U.S., where the government sees chip production as a national security priority.
In a major development, Japanese tech giant SoftBank recently invested $2 billion for a 2% stake in Intel, becoming one of its largest shareholders. But that’s only the beginning. According to multiple reports, Intel is also in talks with several institutional investors to raise additional capital, potentially at discounted valuations, to reinforce investor confidence.
READ: Trump’s ‘Manhattan Project’ for chips could see Intel giving government a stake (
Meanwhile, President Donald Trump’s administration is considering an unprecedented move: converting a portion of Intel’s federal CHIPS Act subsidies into equity. The plan, still under negotiation, would give the U.S. government a 10% non-voting stake in Intel, making it the company’s single largest shareholder. Lutnick has stated that this equity approach ensures taxpayer funds yield lasting value, rather than just subsidizing private enterprise.
Trump’s involvement in Intel’s restructuring reflects a larger shift in industrial policy, where the government is moving from hands-off subsidies to direct financial participation. This marks a significant turn in how Washington approaches tech investment, especially in strategic sectors like semiconductors. After initially questioning Tan’s ties to China, Trump reversed course following a White House meeting, voicing support for Tan’s leadership and emphasizing Intel’s central role in American manufacturing.
The markets reacted with volatility, Intel stock fell sharply on dilution fears, then rallied on news of SoftBank’s backing and possible federal equity involvement. With the 2028 election cycle looming, Intel has become more than just a tech company, it’s now a test case for how public and private sectors may co-invest in critical industries. Whether this bold new approach yields long-term competitiveness or government overreach remains to be seen.