The administration of US President Donald Trump is reportedly looking at a 10 per cent stake in Intel by converting a portion or all its funding from the US CHIPS and Science Act.

Bloomberg reported the Trump administration’s talks with the beleaguered chip maker could include up to $8.5 billion in direct funding from the US CHIPS and Science Act announced last year, along with $3.5 billion in federal grants for the production of chips for the US Department of Defense.

The news agency stated the federal funding could be used to partially finance the 10 per cent equity stake in Intel, but noted negotiations are in the early stages and other arrangements could be reached.

Bloomberg reported Trump’s interest in propping up the chipmaker is part of a move to strengthen domestic semiconductor manufacturing across sectors it deems central to US national security.

It reported last week the US government entered talks with Intel about taking a stake in the chipmaker after President Donald Trump appeared to soften his stance on a call for CEO Lip-Bu Tan to resign immediately.

In a similar move last month,  Nvidia and AMD reached an agreement with the US government to restart sales of their AI chips to China, with the chipmakers to receive export licences in return for paying a levy of 15 per cent of revenue.

Intel confirmed a plan in April to reduce its headcount going forward as part of an overall effort to cut expenses this year and streamline its operations.

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