- Intel CFO says the company just received $5.7 billion from the US Government
- Trump secured a 10% stake in Intel in exchange for the financial support
- The deal is aimed at keeping Intel in ownership of its foundry
Intel CFO David Zinsner said the company received $5.7 billion from the US government earlier this week as part of a deal that Trump hopes will make Intel profitable and return billions to the US.
The deal involves Intel giving a 10% stake to the US Government, negotiated by Trump, who also secured a 5% warrant if Intel’s ownership of its foundry drops below 51%.
However, despite signs that the deal is certainly underway, White House Press Secretary Karoline Leavitt said it’s still being finalized by the Department of Commerce.
Intel’s US Government deal seems to be going ahead
Looking ahead, Zinsner suggested Intel may seek outside investment for its foundry unit in order to attract strategic investors over purely financial deals, but this could be years away.
Trump’s stake in Intel is meant to encourage the company to retain control of its foundry business, boosting the US economy and supporting jobs.
“I don’t think there’s a high likelihood that we would take our stake below 50%,” Zinsner said (via Reuters). “So ultimately, I would expect (the warrant) to expire worthless.”
However, Intel isn’t so sure about the effects Trump’s deal could have on the company, citing potential complications with securing international deals. Intel also noted that the White House’s interests may differ from its own.
Despite the scale of the deal, Intel is still set to lay off thousands of workers. Since taking office just months ago, new CEO Lip-Bu Tan has vowed to slash headcount to around 75,000 in order to turn the company around.
Last month, Intel posted quarterly revenue that was flat year-over-year – at $12.9 billion. Intel shares were up 0.2% following this week’s announcement, but despite a 21.58% increase this year to date, they’re still down 50.85% over the course of the past five years.