The announcement comes after Intel secured up to $3 billion in direct funding under the US CHIPS and Science Act.

Intel Corp. Chief Executive Officer Pat Gelsinger has landed Amazon.com Inc.’s AWS as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker.

The two companies will co-invest in making "fabric chips" that will be built in a new factory under construction outside Columbus, Ohio.

Intel is making two new AI-capable chips for Amazon's cloud computing unit, including one based on Intel's Xeon 6.

The announcement came after Intel said earlier in the day it would receive up to $3 billion in funding under the CHIPS and Science Act to manufacture chips for the military. Intel Foundry and Amazon Web Services will coinvest in a custom chip design for the latter and “announced a multi-year,

The deal will expand Intel's strategic collaboration with Amazon Web Services (AWS). Under the deal, Intel Foundry -- the contract manufacturing arm of Intel -- will produce an artificial intelligence (AI) fabric chip for AWS on Intel 18A process.