The Trump administration’s big Intel investment comes from already awarded grants

Intel formally announced an agreement with President Donald Trump’s administration on Friday afternoon, following Trump’s assertion that the government would be taking a 10% stake within the struggling chipmaker.

Whereas Intel says the federal government is making an “$8.9 billion funding in Intel widespread inventory,” the administration doesn’t look like committing new funds. As a substitute, it’s merely making good on what Intel described as “grants beforehand awarded, however not but paid, to Intel.”

Particularly, the $8.9 billion is meant to come back from $5.7 billion awarded-but-not-paid to Intel underneath the Biden administration’s CHIPS Act, in addition to $3.2 billion additionally awarded by the Biden administration by means of the Safe Enclave program.

In a post on his social network Truth Social, Trump wrote, “The USA paid nothing for these shares.” Nonetheless, he described this as “an excellent Deal for America and, additionally, an excellent Deal for INTEL.”

Trump has been important of the CHIPS Act, calling it a “horrible, horrible thing” and calling on Home Speaker Mike Johnson to “get rid” of it. In a regulatory filing in June, Intel mentioned that whereas it had already acquired $2.2 billion in CHIPS Act funding, it had subsequently requested an extra $850 million in reimbursement that the federal government had not but paid.

According to The New York Times, some bankers and legal professionals imagine the CHIPS Act could not enable the federal government to transform its grants to fairness, opening this deal to potential authorized challenges.

Along with his concentrating on of the CHIPS Act, earlier this month Trump additionally accused Intel CEO Lip-Bu Tan of conflicts of pursuits and said he should “resign immediately.” The president was extra constructive about Tan on Friday, saying on Fact Social that he “negotiated this take care of Lip-Bu Tan, the Extremely Revered Chief Government Officer of the Firm.”

For his half, Tan mentioned in a press release that the corporate is “grateful for the arrogance the President and the Administration have positioned in Intel, and we stay up for working to advance U.S. know-how and manufacturing management.”

Intel’s announcement additionally says the federal government’s funding will probably be “passive,” with no board seats or different governance and data rights.