After the US government took a 10 percent stake in Intel in exchange for the funds provided under the CHIPS Act, Intel CEO Lip-Bu Tan warned that the move could jeopardize the company"s sales in international markets and negatively impact investors and employees.
In a video posted on Monday by the Commerce Department, Intel CEO also emphasized that the company doesn"t need grants from the US government, but he "really look forward to having the U.S. government be my shareholder."
In a filing with the Securities and Exchange Commission, Intel warned of potential "adverse reactions" from "investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors." The company also noted that changes in the political landscape could challenge or even void the deal, creating risks for shareholders.
"There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company," Intel added.
Intel"s concerns about the US government"s stake in the company and its potential impact on international sales may be justified. Last year, Intel reported that 76 percent of its revenue came from markets outside the US, with China alone accounting for 29 percent of total revenue.
China recently launched a probe into Nvidia over allegations of embedded backdoors in its AI chips. While Nvidia has denied the claims, China reportedly urged local companies to stop purchasing AI chips from the company. Intel is likely keen to avoid a similar outcome.
On Friday, Commerce Secretary Howard Lutnick announced that the US government has acquired a 10 percent stake in Intel, purchasing 433.3 million shares at $20.47 each.
Intel stated that selling shares to the US government at a discount would dilute existing shareholders. The government purchased Intel shares at a $4 discount relative to the company"s closing stock price.