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

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

While Intel says the government is making an “$8.9 billion investment in Intel common stock,” the administration does not appear to be committing new funds. Instead, it’s simply making good on what Intel described as “grants previously awarded, but not yet paid, to Intel.”

Specifically, the $8.9 billion is supposed to come from $5.7 billion awarded-but-not-paid to Intel under the Biden administration’s CHIPS Act, as well as $3.2 billion also awarded by the Biden administration through the Secure Enclave program.

In a post on his social network Truth Social, Trump wrote, “The United States paid nothing for these shares.” Nonetheless, he described this as “a great Deal for America and, also, a great Deal for INTEL.”

Trump has been critical of the CHIPS Act, calling it a “horrible, horrible thing” and calling on House Speaker Mike Johnson to “get rid” of it. In a regulatory filing in June, Intel said that while it had already received $2.2 billion in CHIPS Act funding, it had subsequently requested an additional $850 million in reimbursement that the government had not yet paid.

According to The New York Times, some bankers and lawyers believe the CHIPS Act may not allow the government to convert its grants to equity, opening this deal to potential legal challenges.

In addition to his targeting of the CHIPS Act, earlier this month Trump also accused Intel CEO Lip-Bu Tan of conflicts of interests and said he should “resign immediately.” The president was more positive about Tan on Friday, saying on Truth Social that he “negotiated this deal with Lip-Bu Tan, the Highly Respected Chief Executive Officer of the Company.”

For his part, Tan said in a statement that the company is “grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership.”

Intel’s announcement also says the government’s investment will be “passive,” with no board seats or other governance and information rights.