Trump’s Investment in Intel Is Paying Off
The Trump administration investment in Intel appears to be paying off, but the once-mighty chipmaker has a long way to climb back to industry dominance.
In August, the U.S. government announced that it was converting about $9 billion in federal grants that had been issued to Intel during the Biden administration into a roughly 10 percent equity in the company. During its third-quarter earnings call on Thursday — its first financial update since President Trump's surprise investment — Intel reported that it earned $13.7 billion in revenue in the past three months, a 3 percent year-over-year increase. It's the fourth consecutive quarter that Intel has beaten revenue guidance.
Intel's stock price has risen more than 90 percent since it struck the deal with Trump over the summer. Back then, the company's shares were trading around $20. On the heels of its earnings report today, its share price had risen to $38.16.
The White House announced it is investing in Intel weeks after Trump publicly called for CEO Lip-Bu Tan to resign over his alleged problematic ties to China. The president changed his stance just days later, however, after having what he described as a positive meeting with Tan.
On the earnings call, Tan said he was “honored by the trust and confidence” that Tump and Commerce Secretary Howard Lutnick had placed in him. He added that Intel is “fully committed to the vision of the Trump administration and proudly welcomes the US as an essential partner in our efforts.”
Intel's stronger-than-expected earnings suggest global demand for x86 chips, the kind in which Intel specializes, will continue to rise as the tech industry invests heavily in AI infrastructure. While GPUs, such as Nvidia's H100s, remain the gold standard for training AI models, data center buildouts include a combination of GPUs and x86 CPUs, powering various AI workloads.
Intel noted in the earnings call that it could not supply its device customers with enough older chips, which are not as advanced as newer generations of AI semiconductors. This is partly because consumer demand for AI-powered PCs is not particularly strong, so device manufacturers are still looking for older and cheaper chips.
Intel also reported a net income of $4.1 billion. A year ago, the company said it had more than $16 billion in losses. Under Tan's leadership, Intel has aggressively sought to cut costs, including by laying off 15 percent of its workforce.
The past few months have been busy for Intel. Along with the Trump administration, GPU giant Nvidia and multinational tech conglomerate Softbank has also pumped money into the company in exchange for common stock. In the last quarter, Intel received $5.7 billion from the US government, $5 billion from Nvidia, and $2 billion from Softbank. It got an additional $5.2 billion by selling stakes in chip maker Altera and autonomous driving company Mobileye.
