Intel and the United States are set to conclude an $8.5 billion funding agreement for chip manufacturing by the end of the year, according to reports from the Financial Times.

Intel and the U.S. government are expected to finalize $8.5 billion in direct funding for the semiconductor company by the end of this year, according to a report from the Financial Times, which cited sources familiar with the negotiations.

While discussions are reportedly at an advanced stage, there is no assurance that an agreement will be reached before the end of 2024. The report also noted that any potential acquisition of Intel, in whole or in part, could jeopardize the ongoing negotiations.

Neither Intel nor the U.S. Department of Commerce responded immediately to requests for comments from Reuters.

In March, U.S. President Joe Biden granted Intel nearly $20 billion in loans and grants aimed at enhancing the company's semiconductor production capabilities within the United States.

The initial agreement includes $8.5 billion in grants and up to $11 billion in loans for Intel's operations in Arizona, where part of the funding will be allocated to constructing two new factories and upgrading an existing facility.

Earlier this month, it was reported that Qualcomm has approached Intel to discuss a possible acquisition of the struggling chipmaker.

Once a leader in the chip manufacturing sector, Intel has lost its competitive edge to Taiwan Semiconductor Manufacturing Co (TSMC) and has struggled to produce a highly sought-after chip that has been pivotal in the generative artificial intelligence surge, which has been successfully leveraged by Nvidia and AMD.