The US government drops its CHIPS Act requirements for Intel
Intel no longer has to fulfill certain requirements or meet milestones that it was originally supposed to under the CHIPS Act, now that the government is taking a stake in the company. According to the Wall Street Journal, Intel said in a filing that it can now receive funding from the government, as long as it can show that it has already spent $7.9 billion on projects that it agreed to take on under a deal with the Commerce Department last year. Reuters notes that Intel has already spent $7.87 billion on eligible CHIPS Act-funded projects.
In addition, the company doesn't have to share a percentage of the total cumulative cash flow it gets from each project with the Commerce Department anymore. It doesn't have to adhere to some of the CHIPS Act's workflow policy requirements and most other restrictions, as well. However, it still can't use the funds it gets from the government for dividends and to repurchase shares.
If you'll recall, the government recently decided to take a 10 percent stake in Intel instead of proceeding with their original CHIPS Act deal. President Donald Trump previously called for Intel CEO Lip-Bu Tan to resign, prompting a meeting between them that led to the new agreement. "He walked in wanting to keep his job and he ended up giving us 10 billion dollars for the United States," Trump said. "So we picked up 10 billion." Intel eventually announced that the US government will "make an $8.9 billion investment in Intel common stock." The purchase will be made up of the $5.7 billion previously earmarked for Intel as part of the CHIPS act, while the rest ($3.2 billion) will be awarded as part of the Secure Enclave program.
Intel CEO David Zinser recently revealed that the company already received $5.7 billion from the government on Wednesday night. The government also previously awarded Intel $2.2 billion in grants under the CHIPS Act, bringing the government's total involvement with the company to $11.1 billion.This article originally appeared on Engadget at https://www.engadget.com/big-tech/the-us-government-drops-its-chips-act-requirements-for-intel-133049932.html?src=rss