U.S. Commerce Secretary Howard Lutnick on Tuesday confirmed the U.S. government is vying for a 10% stake in Silicon Valley pioneer Intel in an unusual deal that would deepen the Trump administration’s financial ties with major computer chip manufacturers and punctuate a dramatic about-face from the president’s recent push to oust the company’s CEO.

Intel Corporation sees a steep rally; speculation over U.S. stake and SoftBank investment fuels optimism, but can it overcome challenges? Click for our INTC update.

Shares in the chip maker rose following news of SoftBank’s planned investment and a possible stake for the U.S. government.

SoftBank is investing $2 billion in Intel, even as the White House is considering taking a 10% stake in chipmaker per reports, as talks with the company and Trump's team advance.

The deal between SoftBank and Intel would involve the creation of roughly 87 million new shares, adding an incremental 2% to Intel’s overall share count. Reitzes believes the transaction will happen before the end of the year.

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The move is part of SoftBank's investing initiatives in the US, which also includes commitments towards AI computing. Intel, which has lagged behind in the chip race after being the erstwhile market leader,