Intel to Sell $15 Billion in Stock After AI Boosts Demand

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2:01Carol Massar:Plus, global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily Podcast with Carol Masser and Tim Stenebeck on Bloomberg Radio. I'm looking up shares of Intel. Nora, congratulations on owning this stock as a U.S. taxpayer. I mean, I guess we all do. I guess we all do. Shares down about 3 % today. The company plans to offer$15 billion worth of new stock. It could be its first public share sale since the company listed all the way back in 1971. It's a bid to extend its comeback and capitalize on the AI boom. Ian King is Bloomberg News' U.S. semiconductor reporter. He joins us from our San Francisco Bureau.

2:42Ian, I want to just cut right to this. Big deal? Not a big deal? I mean, it's a big deal in terms of Intel's recovery. Obviously, if you're an existing shareholder, you're not too keen about being diluted. Well, we all are, I guess, Ian. Yeah, exactly. On the flip side of this, though, Intel is really doing what other large technology companies have already done, which is say, look at these incredible valuations we're enjoying. Maybe we can take some money out of the equity market, and that will protect us on the other side of the balance sheet and basically not endanger our debt ratings and not really stretch that kind of balance sheet with too much more debt in order to fund what we're trying to do going forward.

3:28Okay, I'm so glad you brought this up because that's the part of the balance sheet that I want to talk to you about. In a time when we're talking about Alphabet raising$25 billion by tapping the debt market, also some of the Mag7 doing share sales too, What is it about Intel's balance sheet and its debt that load right now that sort of makes it make sense to do an equity sale rather than tap the debt market? Yeah, no, I mean, that's for Intel in particular, that's an extremely important question. You'll remember under its previous CEO spent, you know, like a drunken sailor, basically building all of these new factories, trying to get into the AI race, trying to become, you know, a chip maker for everybody on the manufacturing side.

4:14Bets that didn't really pay off that had to be kind of reined in by the current CEO, Luke Bhutan, who made it his kind of first order of business to clean up that balance sheet. And he's done some work on that. They've still got a lot of debt, but they have a lot more cash than they used to now. So there's some more strategic freedom coming in there. And really what with this equity raise, what he's doing is creating more strategic freedom without kind of going back on that promise to clean up the finances. I mean, this is a stock that hit a high of$141 just back in June. Now we're seeing the stock sitting at about, what,$98 a share.

4:50But it's also been on a tear up about 167 % year to date. But talk to me a bit about some of the pressures that this company has been facing if we're not looking at that large year-to-date gain. Yeah. I mean, the pressures it's facing still exist, right? None of them have gone away. It's got a little bit of a windfall from this AI boom because some of its generalist chips, CPUs, have become part of the story. but it really hasn't done anything in terms of differentiating itself, coming out with new products that are really, you know, kicking a hole in the ceiling and causing disruptions in the market.

5:26It's not really taking market share from NVIDIA or AMD as of yet. It's just kind of had a windfall. And that gives it, I think, a little bit more latitude to sort of get in the game. The other thing it's trying to do is to find outside users for this factory network that it has built because it can't fill them itself. It has to sort of build more capacity, has to be ready at a kind of moment's notice to be able to build out capacity to help them and help itself to an extent. So that's really, you know, a lot of the challenges, the fundamentals are still really in place and they really have to be sorted out going forward and cash helps, right?

6:03Well, how much money, Ian, does Intel have to spend in order to build the facilities that it needs to get to market what it thinks is the future of its company? Yeah, I mean, that's a very good question. $15 billion is a lot of money for me, not much for somebody on TV like you. I didn't know you were going to say that, but it does feel like$15 billion is not a lot of money when we talk about CapEx and when we're talking about the context of AI. But for the record, that's a lot of money for me. I mean, it's about half of what a leading edge factory built from the ground up to completion in terms of being equipped and ready to go would cost.

6:40So, sounds like a lot of money, but it really isn't. So we should anticipate, I assume, the company taking on potentially more debt or tapping the equity market or doing something in another fashion later down the road as we still continue to see this company really trying to scale? We'll see. I mean, I think what investors have liked about this new management team is they said, look, we're not going to do this, build it, and they'll come kind of speculative, kind of borrowing and building. We're going to have firm orders. We're going to have firm commitments from customers, and then we'll do it.

7:15So potentially, yes, in terms of tapping new financing, but only at least if we take them at their word when they are sure that those bets will pay off, when that money will be repayable in short order. I mean, how many CEOs has Intel had while talking publicly about a turnaround? Is it three, four? Yeah, I mean, this was, Brian Krasanich was the last CEO that, you know, was a CEO of Intel that was at the peak of its powers, rapidly lost its way. Obviously, he was ousted. Then we had Bob Swan, you know, and then we had Pat Gelsinger. And now we've got Lib Boutin, who was sort of brought in because the turnaround that Pat Gelsinger promised wasn't really materializing as fast as some had hoped.

7:58And so, yeah, we've heard, you know, enough of the story and we now need to see more of the action. And to be fair to the current management team, that is kind of their strategy as well in terms of we're not going to talk about it until we can actually do it. Well, they don't need to talk about it because we're the ones we can talk about it. I can ask you questions about it. You've been covering this company for a long time. And if we were thinking about it, maybe in the metaphor of baseball, for example, and we're talking about a nine inning game. At this point in 2026, where do you think we are in Intel's turnaround?

8:33You're going to ask somebody English for a baseball metaphor? Should we do like a soccer game? I don't know. I don't know. It's got three things it needs to do. Clean up the balance sheet, improve its own products and get them in the AI race and find outside customers. It's done one of those three things. Its products are improving, but they're still not taking back market share, still doesn't have those big customers. So a third of the way through. Is that fair enough? Yeah, I'll accept that as an answer. You know, we'll take it. So, I mean, when we're thinking about sort of outside investments, we know that the U.S.

9:12government, of course, is involved with the company, NVIDIA. But how are we thinking about its customer base that you just kind of alluded to just there? Yeah, I mean, it already has a limited investment from NVIDIA. It already has a limited investment from SoftBank. But what we're really talking about is if Intel gets its factory production up to the same kind of standards as, say, Taiwan's TSMC, then this massive kind of squeeze that we're seeing on the supply shack might come to be something that's favorable for Intel, that maybe NVIDIA, maybe Apple, maybe any of the big kind of silicon buyers might be able to use Intel as an outsourced provider of silicon for them.

9:54And that would be a massive windfall for Intel. But it has to get there, right? It has to have a seat at the table before it can actually play that game. And we're seeing progress. They're touting progress. But we can't really believe that until it sees, you know, it has those orders. Is it too early, Ian, just in the last 30 seconds to talk about NVIDIA earnings on the 26th of this month? It's not too early at all. I mean, what everybody is focused on, we've seen a lot of activity, a lot of competition. Is that competition making any impact on NVIDIA or is NVIDIA still growing up and to the right?

10:28And that's going to be, I think, a key point of tension as we see them report earnings this time. Ian King, we love it when you join us. We'll talk baseball. We'll talk anything with Ian King, specifically though, chips. Ian King is U.S. Semiconductor Reporter. For Bloomberg News, he joins us from our San Francisco bureau. Stay with us. More from Bloomberg Businessweek Daily coming up after this.

10:54Carol Massar:What if data didn't sit still? What if intelligence moved with us? Not buried in reports, but activated in real time. Where lives are being shaped. Where decisions are being made. It all starts with a question. Where is the potential? Coatality turns data into clarity. Intelligence into insight. Insight into action. Because when intelligence moves, we all move forward. Coatality. Intelligence beyond bounds. This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening, as the days of stumbling across a cheap seat on a popular flight could soon disappear.

11:41Carol Massar:Bloomberg's Wan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time. The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes.

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13:33Carol Massar:You're listening to the Bloomberg Business Week Daily Podcast. Catch us live weekday afternoons from 2 to 5 Eastern. Listen on Apple CarPlay and Android Auto with the Bloomberg Business App. Or watch us live on YouTube. Well, you may recall Friday afternoon, it was actually during our program, President Trump touted$3 billion in U.S. investments in critical minerals mining. This was at a meeting with top industry executives. It was aimed at weaning the U.S. off supply chains dominated by China. The president was joined by executives from prominent companies, including Rio Tinto, BHP, MP Materials, USA Rare Earths, Energy Fuels, the metals company and more.

14:11One of the people who was there at that meeting with the president was Gary Evans. He's chairman and CEO of U.S. Antimony. It's got a market cap of about a billion dollars. It refines, produces, sells antimony products. Shares are up around 34 % so far this year. Gary Evans joins us from our Miami Bureau. Gary, good to have you back with us. I just want to hear your main takeaway from that meeting with the president on Friday. What were your main takeaways? Well, I think more than anything else, we have an administration that very much recognizes the dire need of critical minerals for our country, for our industries in this country, and obviously our militaries.

14:53So the support that this administration has provided to the mining industry has been immense. And the real event on Friday at the State Department was a$100 million grant that the federal government is giving to universities and schools in order to train new engineers and geologists and the technical people that we need in this industry because we all are getting older, a lot of people are retiring, and this industry has been in the doldrums for the better part of 30 years. And so having that kind of financial commitment to the schools, there were a lot of administrators there. For me, the big takeaway was some incredible contacts that we made at this forum.

15:42There were a lot of very influential people involved in the critical mental space, both from a banking finance area, as well as some of the administrators like the Secretary of Interior was there, Secretary of State was there, and we were able to have one-on-one meetings with them about issues we might have. And so I think what I got, when I came away from that conference, realizing that if I need help, there's people I can call to get help. And that's very, very important, something we've never had. So take us into the specific conversations that you had. Who did you speak to from the administration and what did you tell them that you needed?

16:18Well, I'll be specifically frank. The new or the Secretary of Interior, Doug Burgum, he and his assistant were there. And he stayed after the forum was over and was talking to people. And I went up to him. We have an issue in Alaska specifically related to the BLM, which is under his venue, and the Department of Transportation, which is not, but he has influence on. And it has to do with a new property we bought in Alaska in January. And we're just getting pushback and slowness from local officials, not understanding that that antimony that we're trying to bring out of this mine is needed by the federal government.

16:57We have a$245 million contract to fulfill the needs of the military. And we've got local people in Alaska holding things up. So I gave him the information. He took it down. He said, I'll be on it Monday. And I have no doubt he will be. So that's the kind of thing that we express to them. So when you think about these conversations that you're having and you think about the future of antimony, you're pretty optimistic, it sounds like, coming off of that. Anything other than that that you would say concrete that you are looking to see advancements on as it relates to relationships between your company and the U.S.

17:33federal government? Well, we won a$27 million grant last year, and then we won the$245 million contract. We've got, though, over$350 million of additional grant requests in to various departments of the federal government to assist us, not only in antimony, but in tungsten and some other critical minerals we're involved in. And what I'm kind of hearing through the conversations is that the president really wants to go more from a grant, which is basically a gift to the companies to more of an equity component. In other words, we'll give you X amount of dollars, but we also want a piece of your company.

18:12He talked at this forum about the success he's had with Intel, the success he's had with MP Materials. And so there was a new fellow that I met there actually from Dallas that is now kind of key at the White House and looking at these investments. I also heard very loud and clear they want to do bigger deals. $500 million minimum or bigger. And so we're looking at packaging some things. We're looking at, okay, we can step it up and look at bigger. Okay. That's one of the things that we're doing. So it raises the question, how much of your company would you be willing to sell to the U.S. government?

18:51Well, that all depends on how much money they're willing to give me. So, you know, we're a publicly traded company with a billion-dollar market cap. So we'll have to look at it like any other investment. However, if the government will give you certain additional incentives, say price floors or minimum contracts or other things that would assist your business, you can look at maybe not only just equity but some warrants that are out of the money, other things that gives the government incentives. So we would look at it like any investment banking transaction. But if you'd asked me this six months ago, I'd say, well, no, I'd rather have the grant.

19:29Obviously, the grant is non-dilutive equity, but if you're having the government as a shareholder, I would prefer not over 20 percent would be fine. And broadening out just a bit, how quickly when we think about the U.S. domestically in terms of our critical mineral supply chain, how quickly do you think that we could actually push forward with those strategies, those plans? And is government support enough to make these projects economically viable? law. Well, what's made them much more valuable today is the price of all these critical minerals and rare earths has gone up dramatically. Why has that happened?

20:07China, over the last 30 years, has gone around the world and tied up all these critical minerals. For antimony, they own 85 % of worldwide reserves. For tungsten, it's close to 90 % of worldwide reserves. We have sat and let our country stay behind the eight ball for 30 years while China has done this. So we're playing catch up no doubt about that and it's going to take time we can't do it overnight but having the regulations removed so that we can move quicker you know we've learned a lot from the past with regarding some environmental issues we are very big environmentalists in our company you know when we dig up something we try to bury it again you know within weeks not years down the road so we've gotten some kudos from a lot of the regulatory agencies that hey you guys are really doing a great job.

20:55And so I'm a big conservationist. I love to hunt. I love to fish. I don't want to leave what we do and, and, and ill repair. So we we've made sure that we are the type of company that people will wish that we had come rather than somebody else. So, um, you know, that's a very important Gary, we got to go chairman, uh, Gary Evans, always good to, to check in with you. Appreciate you joining us. Even when you're not here in the studio, that's down in Miami, Gary Evans, chairman and CEO of U.S. Antimony. Stay with us. More from Bloomberg Business Week Daily coming up after this.

21:34Carol Massar:This is the Bloomberg Tech Minute brought to you by ChatGPT. Now with ChatGPT work. I'm Carol Masser. Globetrotters hunting for airfare bargains are in for a rude awakening as the days of stumbling across a cheap seat on a popular flight could soon disappear. Bloomberg's Juan Ha reports that airlines from Delta to Virgin Atlantic are adopting artificial intelligence to change seat prices more quickly by weighing dozens of variables in real time, helping capture more revenue while shrinking pricing gaps that once allowed travelers to find bargain fares. Machine learning models can more accurately forecast demand by analyzing historical booking patterns, seat inventory, and seasonal trends, while also continuously tracking competitors' fares and capacity changes to update prices in near real time.

22:21Carol Massar:The technology could lead to higher fares on busy routes as airlines pack flights closer to capacity, but may also result in lower fares on off-peak and lower-demand routes. That's the Bloomberg Tech Minute brought to you by ChatGPT. Put ChatGPT to work on your most ambitious ideas and projects. Get started at ChatGPT.com today by selecting Work Mode, available on Plus and Pro Plans. Whether you're planning a big tech event, launching a new campaign, or just stocking up on team gear, finding the right promotional products makes all the difference. 4imprint offers thousands of options, from on-trend apparel and premium drinkware to tech, totes, and giveaways, so you can find the right fit for any audience, purpose, or budget.

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25:08or books. The push by tens of thousands of young women to gain acceptance into sororities at large schools in the deep South has moved beyond TikTok to something more fixed in the American zeitgeist. Many want to be part of Southern Greek life, but they don't know where to start. So what are they doing? They're doing what anyone does when they want an answer to something. Yeah, they're spending money. They are writing checks, writing checks. Gabriel Baumgartner is a Bloomberg News reporter who wrote this one of the most read stories. Gabriel joins us from our Washington, D.C. bureau. What is going on at these schools?

25:42I went to a college without any Greek life, so this is kind of news to me. But what's going on here?