Intel and U.S. Government Funding

(Reuters) – Intel and the U.S. government are expected to finalize $8.5 billion in direct funding for the chipmaker by the end of the year, according to the Financial Times, citing sources familiar with the discussions.

The discussions are at an advanced stage, but there is no guarantee of finalization before the end of 2024. The report warns that any takeover of all or part of Intel (NASDAQ:INTC) could disrupt these talks.

Intel and the U.S. Department of Commerce have not responded to requests for comment from Reuters.

In March, U.S. President Joe Biden awarded Intel nearly $20 billion in grants and loans to enhance domestic semiconductor chip production. The preliminary agreement includes $8.5 billion in grants and up to $11 billion in loans for Intel in Arizona, with some funds allocated for building two new factories and modernizing an existing facility.

Earlier this month, it was reported that Qualcomm (NASDAQ:QCOM) has approached Intel to explore a potential acquisition of the struggling chipmaker.

Once the leader in chip manufacturing, Intel lost its edge to rival Taiwan Semiconductor Manufacturing Co (TSMC) and has struggled to produce popular chips for the current generative artificial intelligence boom, which has been capitalized on by Nvidia (NASDAQ:NVDA) and AMD (NASDAQ:AMD).