Intel has amended its CHIPS Act funding agreement with the U.S. Department of Commerce, granting the chipmaker earlier access to approximately $5.7 billion in cash. The revised deal, which updates a prior arrangement from November 2024, removes some earlier project milestones, providing Intel with significantly more flexibility in how it manages the funds. However, the agreement retains key guardrails that prevent the use of government money for shareholder dividends, stock buybacks, or certain expansion activities in foreign countries of concern.
As part of the amended terms, Intel issued 274.6 million shares to the U.S. government and granted an option to purchase up to 240.5 million more shares under specific conditions. This transaction gives the government a 9.9% equity stake in the company, an unusual move that has raised questions about the government’s role in corporate America. An additional 158.7 million shares were placed in escrow, to be released once more CHIPS funds are allocated for Intel’s Secure Enclave program, which is focused on expanding advanced chip manufacturing.
The government’s total investment in Intel now stands at $11.1 billion, comprising this $8.9 billion investment and previous grants of $2.2 billion. According to Intel Chief Financial Officer David Zinsner, the equity stake serves as a powerful incentive for the company to retain control of its crucial contract manufacturing business, known as its foundry operation.
Intel confirmed it has already spent at least $7.87 billion on projects eligible for CHIPS Act funding. This revised agreement accelerates the flow of capital to Intel, providing it with greater operational flexibility as it continues its large-scale manufacturing expansion in the United States.
