The White House confirmed on Tuesday that the Trump administration is working on a deal that could see the US government taking a 10% stake in chip giant Intel.

“The president wants to put America’s needs first, both from a national security and economic perspective,” White House press secretary Karoline Leavitt told reporters.

The potential deal could involve swapping government grants for Intel shares, according to US Commerce Secretary Howard Lutnick.

The move could help Intel as it struggles to compete with rivals like Nvidia, Samsung and TSMC, particularly in the booming artificial intelligence (AI) chip market. Intel has been contacted by the BBC for comment.

The US wants a stake Intel in exchange for grants approved during the Biden administration, Lutnick said on CNBC on Tuesday.

“We should get an equity stake for our money,” he added. “We’ll get equity in return for that… instead of just giving grants away.”

The potential deal, which was first reported last week, aims to help Intel build a flagship manufacturing hub in the US state of Ohio. At the time, a White House spokesman told the BBC that the reports “should be regarded as speculation” unless officially announced.

Last week, Intel did not comment directly about reports but said it was “deeply committed to supporting President Trump’s efforts” to strengthen manufacturing and technology in the US.

On Monday, Japanese investment giant Softbank said it would buy a $2bn (£1.5bn) stake in Intel.

After the announcement, Intel’s shares rose by almost 7% in New York on Tuesday.