Intel (BDR:) sought Apple () in search of an investment, according to people, as part of the effort to reinforce the business of the chip manufacturer, which now have the US government participation.
The two companies also discussed ways to expand cooperation, the sources said, which asked for anonymity because the conversations are private. Negotiations are still at an early stage and may not result in agreement.
Intel’s shares rose 4% pre-market on Thursday (25). On Wednesday, they closed up 6.4%, to $ 31.22 in New York, after Bloomberg News Disseminate the negotiations. Apple’s papers fell less than 1%to $ 252.31.
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The movement follows the $ 5 billion contribution made by Nvidia Corp. last week. The company plans to work with Intel in the development of chips for personal computers and data centers. In August, the Softbank Group Corp. announced $ 2 billion investment in Intel.
According to sources, Intel also sought other companies in search of contributions and partnerships.
An agreement with Apple – a longtime client who has changed Intel’s chips for their own processors in the last five years – would give new validation to the manufacturer’s attempted recovery attempted. Still, Apple is unlikely to use Intel processors again on its devices. The company’s most sophisticated chips are produced by Taiwan Semiconductor Manufacturing Co.
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Intel didn’t comment. Apple did not respond to the request for comment.
Intel’s CEO, Lip-BU Tan, tries to promote the company’s recovery with support from the federal government. In an unusual agreement, brokered by the Trump administration in August, the US acquired about 10% stake in the manufacturer. Intel is considered a central piece in the strategy of reinforcing domestic semiconductor production, White House priority.
Even with financial support, the challenges follow significant. The company, based in Santa Clara (California), has lost technological leadership and space for competitors such as Advanced Micro Devices Inc. In addition, it failed to take advantage of the demand for artificial intelligence equipment – an area dominated by Nvidia.
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Once absolute leader, Intel today has much lower revenue and market value than those of Nvidia. The company has reduced personnel and postponed factories expansion plans to deal with financial pressure.
Nevertheless, investors optimism has increased since government contribution. The shares have accumulated high of more than 60% since early August.
Under the previous management, by Pat Gelsinger, Intel tried to reposition itself as a chip casting – producing semiconductors for external customers. But the company failed to gain enough demand to justify industrial expansion.
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Tan maintained the foundry strategy, but more cautiously. In July, he said Intel would only launch new tip technology – called 14th – if there was a firm commitment of customers.
Apple and Intel have a long relationship, marked by friction. Apple used Intel chips in its Macs for years, but began to replace them by 2020, within a strategy of expanding the use of their own components. In 2019, Apple bought most of Intel’s modems division.
Currently, Apple seeks to reinforce the image it invests in the US, although much of the production remains abroad. In August, during an event at the White House, he announced plans to apply $ 600 billion in domestic initiatives over four years, above the previous target of $ 500 billion. The highlight is a contribution of $ 2.5 billion in Corning Inc., the company’s longstanding glass supplier.
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CEO Tim Cook told CNBC that these investments encourage other companies to expand production in the US, creating a “domino effect.”
When asked about Intel, Cook said the competition would be positive for the chip casting sector. “We would love to see Intel back,” he said.
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