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the u.s. government is expected to finalize $8.5 billion in direct funding for intel by the end of the year, people familiar with the matter said, even as the company tries to stabilize its struggling business.

as intel implements deep cost-cutting measures, the company and the u.s. government are racing against time to complete months of complex technical negotiations. intel's recent troubles have drawn attention: rival chip company qualcomm has explored acquiring a stake in intel, and other companies may also approach intel.

although intel has paused a major investment project in germany to help address financial difficulties, finalizing the support package would amount to a vote of confidence in intel from the u.s. government.

two people confirmed that discussions between the two sides were at an advanced stage, but cautioned that there was no guarantee it would be finalized before the end of the year. they confirmed that any acquisition of all or part of intel's business would likely derail negotiations.

intel and the u.s. commerce department declined to comment.

preliminary terms of the funding agreement were announced in march this year. it would be the largest single subsidy provided through the chip act, which aims to boost domestic chip manufacturing and reduce reliance on asian supply chains.

with only a few weeks until the november 5 election, the biden administration must complete its support plan as quickly as possible. biden, who will leave the white house in january, has invested significant political capital in intel and has highlighted his work in improving u.s. chip manufacturing capabilities as a pillar of his performance.

biden visited intel's arizona factory in march to promote the temporary funding agreement, which the administration said would bring 3,000 manufacturing jobs and 7,000 construction jobs to arizona.

"i wouldn't be surprised if this deal was finalized before the election," said a person close to intel.

uncertainty about intel's future and speculation about whether it might sell off its manufacturing unit has put renewed focus on the u.s. government's continued support for intel, with u.s. commerce secretary gina raimondo calling intel a "champion" for the country semiconductor companies.

"it's too early to talk about all of these investments to judge their impact," said techinsights' g dan hutcheson. "but part of the purpose of the chip act is to ensure that intel continues to receive support from the u.s. government as an american company."

under the chip act, the government will directly allocate approximately $39 billion specifically to support manufacturing. intel's tentative $8.5 billion package is the largest award for a single company and comes with up to $11 billion in additional loans. rivals such as tsmc and samsung also received funding. separately, intel received a $3 billion grant to make chips for the u.s. military.

of course, there's been other encouraging news from intel recently. earlier this month, intel said it would make artificial intelligence chips for amazon using its latest and most advanced "18a" manufacturing process, which intel said was a "several-year, multi-billion-dollar framework." the two companies said they would jointly invest in custom chip designs.