The Trump Administration is said to be in talks with Intel regarding a possible $10 billion investment in the beleaguered chip producer.

As per Bloomberg, referencing anonymous White House sources, the U.S. administration is contemplating the purchase of a 10 percent share in Intel, estimated at around $10.5 billion according to its market valuation. The details surrounding the agreement, or if it will come to fruition, remain unclear. One potential scenario involves transforming grants from the CHIPS Act into equity. This legislation, established by the previous Biden Administration, was designed to allocate federal resources for domestic semiconductor production.

Amid the surge of AI, Intel has fallen behind international rivals such as Taiwan Semiconductor Manufacturing Co. (TSMC) and the U.S. chip leader Nvidia. President Trump has emphasized the importance of enhancing U.S. chip production to secure a competitive advantage over foreign nations like China. One of the three recent AI executive actions signed by Trump advocates for American technology on both domestic and global fronts. Early in his term, he unveiled the Stargate Project, a $500 billion initiative with OpenAI, Oracle, and others aimed at investing in AI infrastructure.

Established in 1968, Intel possesses a rich legacy in semiconductor manufacturing but has faced difficulties in leveraging the advanced GPUs driving AI models. Long before the mainstream rise of AI, numerous companies relocated their manufacturing overseas. In 2020, Apple terminated a 15-year partnership with Intel for its devices, choosing TSMC in Taiwan to fabricate its chips, which provided cheaper, more sophisticated processors.

A U.S. government investment could revitalize Intel’s waning position and be in line with the Trump Administration’s objectives to foster American-made technology. This update follows Trump’s recent discussion with Intel CEO Lip-Bu Tan to reportedly deliberate over a potential agreement.