In a surprising turn of events shaking up Silicon Valley, embattled chipmaker Intel has reportedly engaged in discussions with Apple, exploring a potential investment to shore up its precarious financial position and breathe new life into its struggling business.
Sources close to the confidential discussions reveal that these conversations have occurred on multiple occasions, notably both before and after the U.S. government injected a substantial $8.9 billion into Intel last month. However, whether Apple will ultimately commit to an investment remains uncertain.
These urgent talks underscore Intel’s frantic efforts to secure much-needed capital and attract new clients as it battles to reverse its declining fortunes.
Just last week, Intel successfully landed a $5 billion investment from Nvidia, coupled with an agreement that the artificial intelligence chipmaker would partner to develop a new semiconductor for A.I. systems. This followed a $2 billion investment received weeks prior from SoftBank, the principal owner of the British chip design powerhouse, Arm.
The Trump administration’s decision to acquire a stake in Intel marked a significant government intervention in a U.S. company, reminiscent of the billions poured into the auto industry in 2008 to avert its collapse during the financial crisis.
Despite its challenges, Intel’s shares closed at $31.22 on Wednesday, representing a 52 percent surge from the government’s acquisition price on August 22. The stock also saw a 6 percent jump on the day the news of talks with Apple, initially broken by Bloomberg, became public.
Both Intel and Apple have maintained silence on the matter, with Intel declining to comment and Apple not responding to inquiries.
Once a pioneering force founded in Silicon Valley in 1968, Intel has unfortunately fallen behind on crucial innovation cycles, notably the explosive growth of smartphones and, more recently, artificial intelligence. Its ambitious attempts to keep pace with competitors in chip manufacturing have stumbled, leaving it struggling to offer a compelling product in the rapidly evolving AI landscape.
An image shows the Intel logo outside a glassy office building, reflecting its past as an industry pioneer now struggling to catch up with rivals in chip manufacturing. (Photo by Anastasiia Sapon for The New York Times)
U.S. Commerce Secretary Howard Lutnick has actively sought to aid Intel, recognizing its critical role as the last remaining American manufacturer of cutting-edge chips. Before assuming office in January, Lutnick reportedly engaged with Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s leading chip producer, to discuss a potential takeover of Intel’s manufacturing division, which would then operate as an independent entity. The strategic vision for this new company included investments and stakes from major tech players like Apple and Nvidia.
A key obstacle for Intel has been its inability to match TSMC’s prowess in manufacturing the most advanced chips. Industry insiders indicate that Apple, a current client of TSMC, has been reluctant to transfer its chip production to Intel due to concerns over Intel’s lagging technological capabilities.