Intel Secures $5.7 Billion from Trump-Era Deal Amid Ongoing Negotiations

Intel’s financial coffers just got a whole lot fatter. CFO David Zinsner revealed Thursday that the chip giant received a hefty $5.7 billion infusion from the U.S. government the previous evening.

Zinsner made the announcement during an investor conference, framing the investment as part of the White House’s move from last Friday regarding taking a 10% equity stake in the semiconductor company. The move could prove pivotal in Intel’s ongoing efforts to regain its footing in the global chip race.

But the story doesn’t end there. Zinsner also hinted at a potential strategic maneuver: exploring outside investment for Intel’s foundry business. This division, responsible for manufacturing chips for other companies, is increasingly seen as a key growth driver.

While Intel’s second-quarter results, reported on July 25th, exceeded expectations, shares took a tumble, dropping 8%, fueled by investor jitters surrounding the foundry unit. The concern? The capital-intensive nature of building and maintaining cutting-edge chip fabrication facilities.

“There’s likely going to be some opportunity for outside investors in foundry, and that will probably be our second opportunity to raise cash to fund the growth on the foundry side,” Zinsner stated, suggesting a potential partial spin-off or strategic partnership.

The White House is acknowledging that the agreement is still being finalized. Press secretary Karoline Leavitt stated Thursday that the Intel deal is still being processed by the Department of Commerce.

“The T’s are still being crossed, the I’s are still being dotted,” Leavitt said. “It’s very much still under discussion.”

However, Intel’s own filing on Monday hinted at possible turbulence ahead. In a regulatory filing, the company warned that the deal could stir “adverse reactions” from key stakeholders, including investors, employees, and even foreign governments.

“There could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors,” the filing stated. “There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company.”