The Trump administration is in discussions to take a stake of about 10% in Intel Corp., according to a White House official and other people familiar with the matter, in a move that could see the U.S. become the beleaguered chipmaker’s largest shareholder.

The federal government is considering a potential investment in Intel that would involve converting some or all of the company’s grants from the U.S. Chips and Science Act into equity, said the people, who asked not to be identified because the information is confidential. Intel has been slated to receive a combined $10.9 billion in Chips Act grants for commercial and military production.

That figure is roughly enough to pay for the targeted holding. At Intel’s current market value, a 10% stake in the chipmaker would be worth roughly $10.5 billion. The exact size of the stake, as well as whether the White House chooses to move ahead with the plan, is still in flux, the people said.

White House spokesman Kush Desai declined to comment on the specifics of the discussions, saying only that no deal is official until it’s announced by the administration. The Commerce Department, which oversees the Chips Act, also declined to comment. Intel didn’t immediately respond to a request for comment.

The White House official also floated the possibility that the administration could convert other Chips Act awards into equity stakes. It’s not clear whether that idea has gained traction broadly within the administration or whether officials have broached the possibility with any companies that could be affected.

A big question is whether the government assistance will help reinvigorate Intel’s business. The company is suffering from stagnant sales and continuing losses, and it has struggled to regain its technological edge in the industry. New Chief Executive Officer Lip-Bu Tan is seeking to turn around the company, but his efforts have largely been focused on cutting costs and eliminating jobs.

Intel investors initially applauded news of the government investing in Intel, kicking off the biggest one-week rally in the stock since February. But the shares slipped more than 3% on Monday after Bloomberg reported on the latest discussions.

Using the Chips Act money would mean Intel isn’t necessarily getting a bigger government infusion than expected — possibly just one that’s on a faster timeline. As is the case for all Chips Act winners, Intel’s grant money was originally designed to be disbursed over time as the company hits negotiated project milestones. Intel had received $2.2 billion in grant disbursements as of January.

It’s unclear whether that $2.2 billion would be included in the possible equity stake, whether the company has received additional tranches of its award since President Donald Trump took office, and on what schedule Intel would receive money under a possible equity stake. Most of the grants from the 2022 Chips Act were committed to companies under the Biden administration.

Tan met with Trump at the White House last week, helping lay the groundwork for discussions with Intel. The U.S. president had previously taken issue with the executive, calling for Tan’s ouster over past ties to China. After the meeting, Trump praised Intel’s chief, saying he had “an amazing story.” And Tan is expected to stay in the job despite the previous criticisms, people familiar with the matter said last week.

Intel’s future has vexed Trump officials since they first entered office. The pioneering company has fallen behind world leader Taiwan Semiconductor Manufacturing Co. in the production of tiny electronic components that power everything from smartphones to artificial intelligence. That’s complicated attempts to revive chip manufacturing in the U.S. after decades of it shifting to Asia.

Though TSMC and South Korea’s Samsung Electronics Co. are increasing their operations in the U.S., having an American company like Intel building cutting-edge chips on domestic soil has been a priority for both the Trump and Biden administrations.

Officials under President Joe Biden, for example, explored long-shot ideas like a tie-up between Intel and GlobalFoundries Inc. Earlier this year, Trump’s team held early-stage conversations with TSMC about potentially operating Intel’s factories — an arrangement from which TSMC has backed away. Trump officials have also internally floated the prospect of seeking an Intel investment from the United Arab Emirates. It’s unclear whether either of those approaches has progressed much past a thought exercise.

If the Trump administration moves forward with an Intel equity stake, that would fit into a recent pattern that’s seen Washington take a more aggressive role in strategic sectors. Trump’s team secured an agreement to receive a 15% cut of certain semiconductor sales to China and took a so-called golden share in United States Steel Corp. as part of a deal to clear its sale to a Japanese rival.

The Intel idea also echoes the Defense Department’s unprecedented announcement last month that it will take a $400 million preferred equity stake in the little-known U.S. rare-earth producer MP Materials Corp. That deal would make the Pentagon the company’s largest shareholder, with a roughly 15% stake of the firm’s shares.

(With assistance from Brody Ford.)

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