The Trump administration is reportedly considering taking a 10% stake in Intel, in hopes of providing a lifeline to the struggling chipmaker, and boosting domestic semiconductor manufacturing in the U.S.

The New York Times reports that the White House is discussing a plan to convert $10.86 billion worth of recent federal grants into equity in Intel. Such a move would represent one of the most significant government interventions in a U.S. company since 2008's rescue of the auto industry, when Chrysler and General Motors received tens of billions of federal dollars. 

The announcement comes only a week after chipmakers Nvidia and AMD said they would pay 15% from their chip sales in China to the government in exchange for export licenses.

According to CNN, Intel has fallen behind in the chip race after losing to rivals like Qualcomm and Nvidia on the shift to mobile and AI. The chipmaker said last month that it had mostly completed plans to lay off 15% of its staff. 

The grants that would be converted into equity were awarded to Intel under the the Biden administration's CHIPS Act, and were initially earmarked for chip packaging projects in Arizona, New Mexico, Ohio and Oregon. The company also received a $3 billion contract to make semiconductors for the U.S. Department of Defense (DoD). 

A deal to give the federal government a 10% stake in the chipmaker would likely require approval from its board of directors, although it remains unclear how it would address Intel's recent financial struggles, or if it would even be legal. In theory, the White House could buy the stake and then pressure U.S. companies such as Apple and Nvidia into buying Intel's chips in the interest of national security, although Treasury Secretary Scott Bessent claimed in an August 19 interview with CNBC that the "last thing we're going to do is take the stake and then try to drum up business." 

"There's no talk of trying to force companies to try and buy from Intel," he added.

Regardless, the Trump administration has been aggressive in its bid to shore up U.S. semiconductor supply chains in recent months. In mid-July, the DoD agreed to buy $400 million worth of preferred stock in rare earth miner MP Materials, which operates the only rare earth mine in the country. A month later, the DoD agreed to loan the company $150 million for upgrades to its Mountain Pass, California, processing facility.