Intel in talks with other large investors for equity boost at discount, sources say

Intel is in talks with other large investors to receive an equity infusion at a discounted price, people familiar with the matter told CNBC's David Faber.

Intel stock slid more than 7% on Tuesday, after rallying earlier this week on a $2 billion capital injection from SoftBank and reports that the Trump administration is weighing different ways to get involved with the company.

Commerce Secretary Howard Lutnick told CNBC on Tuesday that the U.S. government must receive an equity stake in Intel in exchange for CHIPS Act funds.

Sources told Faber that the chipmaker is now looking beyond SoftBank for an equity boost.

"They need money to build whatever it is that the customers may actually, ultimately want," Faber said on CNBC's "Squawk on the Street." "And having the CHIPS Act money, which is free, so to speak, no strings attached, become equity is not helpful to them because it's dilutive."

Intel is attempting a turnaround after suffering from years of declining sales and shrinking market share.

The company has struggled to capitalize on the artificial intelligence boom in advanced semiconductors and has spent heavily to stand up a manufacturing business that's yet to secure a significant customer.

Intel has also overhauled its leadership, bringing in Lip-Bu Tan to be its CEO in March, after his predecessor, Pat Gelsinger, was ousted in December.

Two weeks ago, President Donald Trump called for Tan to resign, saying he was "highly CONFLICTED."

The president's tone toward Tan and the company cooled after the CEO visited the White House to discuss his background.