Shares of Intel (NASDAQ: INTC) rose 8% on Tuesday after Vice President JD Vance emphasized the Trump administration’s commitment to protecting American artificial intelligence technology from foreign threats.
Speaking at the AI Action Summit in Paris, Vance warned that some authoritarian regimes have misused AI for military and surveillance purposes.
“Some authoritarian regimes have stolen and used AI to strengthen their military intelligence and surveillance capabilities, capture foreign data, and create propaganda to undermine other nations’ national security,” Vance said.
“This administration will block such efforts, full stop.”
Intel shares surged 8% to $20.97 following Vance’s remarks, while Nvidia stock dipped slightly by 0.1% to $133.38.
Vance also criticized excessive regulation of AI, arguing that an overemphasis on safety could stifle innovation and prevent American companies from maintaining their technological edge.
He aimed at European governments for over-regulating US tech firms, warning that restrictive policies could paralyze the industry.
“To restrict its development now will not only unfairly benefit incumbents in the space, it would mean paralyzing one of the most promising technologies we have seen in generations,” he said.
Intel positions itself as an alternative to TSMC
As part of its strategy to maintain AI dominance, the Trump administration is pushing for domestic AI chip production, reducing reliance on Taiwan Semiconductor Manufacturing Co. (TSMC), which currently produces 90% of the world’s most advanced chips.
“To safeguard America’s advantage, the Trump administration will ensure that the most powerful AI systems are built in the US with American-designed and manufactured chips,” Vance said.
TSMC is building plants in Arizona, but they will represent only a small fraction of the company’s total capacity.
Meanwhile, Intel has been trying to position itself as an alternative to TSMC by offering chip-manufacturing services to other semiconductor firms.
In March 2024, Intel announced a $100 billion investment to expand its US chip-making facilities, including building what it claims will be “the largest AI chip manufacturing site in the world” near Columbus, Ohio.
The company is also modernizing its factories in New Mexico, Oregon, and Arizona.
AI competition and leadership changes
Despite Intel’s recent stock gains, the company has struggled to keep pace with competitors like Nvidia and Broadcom, which have benefited from the soaring demand for AI chips.
Intel lost 60% of its value last year and has posted three consecutive quarters of declining revenue.
Adding to the uncertainty, Intel recently announced the departure of CEO Pat Gelsinger after a turbulent tenure.
The company has appointed interim co-CEOs, finance chief David Zinsner and Intel Products CEO Michelle Johnston Holthaus, as it searches for a permanent leader.
While Intel has secured billions in government subsidies to build US chip plants, its ability to regain market share in the AI space remains uncertain.
Investors are watching closely to see if the company can turn its fortunes around with its upcoming Arrow Lake-HX processors, which recently received promising early reviews.
Intel’s AI chip ambitions
Beyond the administration’s AI push, Intel’s recent stock surge was also driven by optimism surrounding its next-generation processors.
Investor excitement has been fuelled by promising preliminary benchmarks for Intel’s upcoming Arrow Lake-HX processors, which are expected to power next-generation gaming laptops.
A review by Tom’s Hardware showed that Intel’s new Core Ultra 9 275HX processor performed well against competitors, raising hopes that the company could gain ground in the high-performance computing sector.
However, industry analysts caution that early benchmark results are based on a single sample and that more comprehensive testing is needed before drawing definitive conclusions.
The full launch of Arrow Lake-HX-equipped laptops, expected to coincide with Nvidia’s RTX 50 mobile series release, will be a key moment for Intel’s AI-driven strategy.
As the battle for AI supremacy intensifies, all eyes will be on Intel and the broader semiconductor industry to see how the US positions itself in the global race for next-generation computing power.
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