Commerce Secretary Howard Lutnick confirmed discussions between the US and Intel Corp. for the government to take a stake in the chipmaker, casting the plan as a bid to convert Chips and Science Act grants into equity.

Shares in the chip maker rose following news of SoftBank’s planned investment and a possible stake for the U.S. government.

The U.S. government wants an equity stake in Intel in exchange for cash grants approved during the administration of former President Joe Biden, Commerce Secretary Howard Lutnick said on Tuesday.

After months of turbulence, Intel Corp. bulls are finally being rewarded for their patience. But the stock’s sudden rebound comes with a worrying side effect: a valuation so high its most recent precedent is from the dot-com era more than two decades ago.

The stock closed nearly 7% higher Tuesday after Japan’s SoftBank (JP:9984) agreed to invest $2 billion in

U.S. Treasury Secretary Scott Bessent on Tuesday said any U.S. investment in Intel would be aimed at helping the troubled chipmaker stabilize, as Commerce Secretary Howard Lutnick said the government wanted equity stakes in exchange for its support of semiconductor manufacturers.

A US government plan to take a stake in Intel Corp. would give the ailing chipmaker a powerful backer, even if a bigger challenge still lies ahead: finding enough paying customers.

The White House on Tuesday said it was “ironing out the details” of a deal that would entail the US government taking a 10 per cent stake in struggling US chipmaker Intel.