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U.S Government Grants Intel $5.7 Billion Financing

U.S. government granted Intel a $5.7 billion investment in exchange for a 10% ownership stake in the company, as disclosed by Intel.

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U.S. Government Grants Intel $5.7 Billion in Funding, According to Company Statements
U.S. Government Grants Intel $5.7 Billion in Funding, According to Company Statements

U.S Government Grants Intel $5.7 Billion Financing

The US government has announced a significant investment in tech giant Intel, as part of a deal worth $11.1 billion. The investment includes the purchase of 433.3 million shares of Intel at $20.47 each, and a $5.7 billion grant as part of a deal to acquire a 10% stake in the company.

The investment is expected to strengthen the US's leadership in semiconductors. Intel has previously received $2.2 billion in grants from the CHIPS Act, and this latest investment brings the total investment from the US government to the tech company to $11.1 billion.

As part of the deal, Intel will also receive a $3 billion Secure Enclave award from the Department of Defense, in addition to the $5.7 billion grant. Intel's Chief Financial Officer, David Zinsner, stated that the move was an incentive for Intel to retain control of its contract manufacturing business, or foundry.

The investment comes as Intel is undergoing restructuring, with plans to reduce its workforce to 75,000 under the leadership of Lip-Bu Tan. The company has also indicated that it could take outside investment in the foundry business and has established a separate management board to govern it.

However, the deal is still under discussion, according to White House Press Secretary Karoline Leavitt, who stated that the "t's are still being crossed and the i's are still being dotted." Intel has not yet revealed any detailed or current publicly available updates on the specific status or expected completion date of negotiations between the company and the US government.

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In other news, Intel raised $2 billion from SoftBank Group earlier this month, and the company is leaning towards a strategic investor versus a financial one, though the company is "years away from that." The US government's acquisition of a 10% stake in Intel is the Trump administration's latest effort to exert control over corporate America.

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