New Delhi, India, 02-September — Intel has finalized a revised funding deal with the U.S. Department of Commerce. The new agreement gives Intel early access to $5.7 billion in CHIPS Act funding. As a result, the company can now speed up its chip manufacturing plans and strengthen its global position.
The original agreement, signed in November 2024, required Intel to meet several project milestones. However, the updated terms remove those conditions. This change enables Intel to access the funds immediately. According to the company, the revision will help it move faster on key infrastructure and research projects.
Although the updated timeline offers more flexibility, the deal still includes strict limitations. Intel cannot use the money for stock buybacks or shareholder dividends. Additionally, the company is restricted from making deals that might alter ownership or expand operations in certain foreign countries. These rules aim to ensure that the funding supports U.S. manufacturing and national security.
As part of the deal, Intel issued 274.6 million shares to the U.S. government. Furthermore, the government has the option to buy another 240.5 million shares if certain conditions are met. Intel also placed 158.7 million shares in escrow. These will be released once the government provides additional funding for the Secure Enclave program, which focuses on advanced chip development.
Intel has already spent $7.87 billion on projects eligible for CHIPS Act support. These include facility upgrades, new equipment, and research efforts aimed at boosting chip production in the U.S. With the new funding, the total government investment in Intel now reaches $11.1 billion. This includes $8.9 billion in equity and $2.2 billion in earlier grants.
The U.S. government’s move to take a 9.9% equity stake in Intel marks a major shift in how it supports private firms. Moreover, President Donald Trump recently hinted that more such deals could follow. This suggests a broader plan to invest in critical industries through direct ownership.
Intel’s CFO, David Zinsner, said the government’s stake helps ensure that Intel keeps control of its foundry business. This division produces chips for other companies and is central to Intel’s growth strategy. By holding onto the foundry, Intel aims to compete more effectively with rivals like TSMC and Samsung.
The timing of this deal is important. The U.S. is trying to reduce its reliance on foreign chipmakers and build a secure domestic supply chain. The COVID-19 pandemic and ongoing global tensions exposed serious gaps in the global tech industry. As a result, there is now a stronger push for local production.
Intel’s collaboration with the government is a key part of that effort. The funding will support new chip factories and expand existing ones across the U.S. In addition, it will fuel development in areas such as defense, healthcare, and AI.
The CHIPS Act supports these goals by offering incentives to companies investing in U.S.-based chip production. At the same time, it includes safeguards to make sure public funds are used responsibly. Intel’s new agreement reflects that balance; it offers more flexibility while maintaining oversight.
Intel
This deal could become a model for future partnerships between the government and private tech firms. Other companies may pursue similar funding strategies, especially as competition heats up in the semiconductor space. Likewise, the government may continue to explore equity-based investment in key sectors.
Intel remains focused on expanding its chip-making capacity. The company plans to use the funds to ramp up construction, increase research, and enhance production. Clearly, it sees this revised deal as a sign of strong government support and a step forward in its mission to lead in advanced chip technology.
In the long run, partnerships like this will shape the future of the semiconductor industry. They help secure supply chains, drive innovation, and serve national interests. Intel’s updated CHIPS Act agreement could serve as a blueprint for how public and private sectors can collaborate on major tech initiatives.
