The US government took a 10% equity stake in Intel in exchange for $5.7 billion in outstanding CHIPS Act grants. The agreement includes a five-year warrant enabling the government to acquire roughly five percent more of Intel if Intel ceases to own 51 percent of its foundry business. The warrant is structured with a trigger that will not activate while Intel maintains majority ownership of the foundry, intended to deter spinning off or selling the loss-making foundry division. Intel reported an $18.8 billion loss for 2024, and the CHIPS Act funding required retained majority ownership.
It's a five-year warrant for what was roughly about five per cent of the shares outstanding. And we created a trigger that as long as we maintain a majority share of the foundry business, it would never trigger in that five-year period,
I think from the government's perspective, they were aligned with that. They didn't want to see us take the business and spin it off, or sell it to somebody. And so in some ways, you could view this as a little bit of friction to keep us from moving in a direction that, I think, ultimately, the government would prefer we not move to,
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