U.S. government consider potential investment in Intel as strategy to establish lead in global chip market, according to news report

In a notable turn of events, the Trump administration is reportedly in talks with Intel to inject federal capital into the tech giant. This potential investment could significantly impact Intel's planned factory in Ohio, a state that holds political significance as it is the home state of Vice President JD Vance.

The negotiations, aimed at expediting U.S. semiconductor production and reinvigorating Intel's Ohio factory, have gained momentum following a White House meeting between President Trump and Intel CEO Lip-Bu Tan. However, the details of the talks are still fluid, and no terms of the potential investment have been confirmed.

The political background of these negotiations is rooted in efforts by the U.S. government to support domestic semiconductor manufacturing. This move is driven by a desire to strengthen national security and economic competitiveness amid tensions with China and global technology competition. The infusion of government subsidies would help finance and accelerate this large-scale investment, positioning the U.S. as a key player in semiconductor production and reducing dependence on foreign supply chains.

The stakes are high, given that semiconductors are a national security concern due to their use in various technologies, including defense systems. The talks come amid reports of pressure on Intel CEO Lip-Bu Tan to resign due to alleged China ties. Senator Tom Cotton, R-Ark., has sent a letter to Intel's board raising concerns about Tan's investments in semiconductor firms reportedly linked to the Chinese Communist Party and the Chinese military.

The 2026 Senate race in Ohio adds political weight to the Intel factory project. If the investment occurs, it would mark a rare instance of direct U.S. government investment in a private tech firm, signalling a shift from traditional subsidies towards direct industrial policy.

The timing of any potential announcement regarding the investment is unclear, with political strategy likely to play a role in determining whether it comes before or after the 2026 election. The White House has not yet responded to FOX Business' request for comment regarding the talks.

Patrick Moorhead, founder of Moor Insights & Strategy, noted that the administration's approach fits with other recent moves, such as investments and requests for revenue cuts from tech firms. As the negotiations continue, the potential Intel investment stands as a significant development in U.S. tech policy and domestic manufacturing.