The U.S. chip giant currently has one major manufacturing facility in Europe—its nearly 35-year-old campus in Leixlip, Ireland. Just over a year ago, it announced it would build two more fabs in the German city of Magdeburg. This was to cost around €17 billion ($18.6 billion), with around €6.8 billion coming from government subsidies. Intel bought the land it needed for this “Silicon Junction” scheme in November.

However, with the tech sector facing soaring energy costs and plummeting stock prices, Intel hit the brakes at the start of this year. It wanted more state aid, and now it has it: Berlin will cough up €9.9 billion. Intel’s promised investment has also gone up to more than €30 billion.

This arrangement—very much a product of its time—should work out as a win-win for most players.

Like the U.S., Europe wants to become far less reliant on China for semiconductor production. With the U.S. successfully spraying around subsidies to attract investment, the European Commission introduced its own Chips Act a couple months ago and has also been taking a more relaxed approach to state aid—subsidies of this scale are usually frowned upon because only richer EU countries can afford them, leaving poorer EU states as the losers. Intel’s increased investment in Magdeburg will be seen as a vindication of that approach, and it would be a surprise to see the Commission, which has yet to clear the deal, take issue with Germany’s massive outlay here.

For Intel CEO Pat Gelsinger, Europe is clearly proving key to his company’s desperate need for growth, as it struggles for relevance in a chipmaking world that’s dominated by Samsung, TSMC, and increasingly Nvidia. The Magdeburg plants will make Intel chips, but will also serve as foundries for the contract customers that Gelsinger has been courting. Intel just announced as well the development of an “up to $4.6 billion” assembly and test facility near Wrocław, Poland, which is around a five-hour drive from Magdeburg.

The Magdeburg deal is Germany’s biggest-ever foreign direct investment, but the idea of boosting Intel’s subsidies was a controversial one, with an equally controversial fix. German Finance Minister Christian Lindner was against any increase, insisting that the federal budget was stretched enough. In the end, the money ended up coming from Germany’s energy and climate fund, prompting the neighboring state of Saxony to immediately demand more support for its own renewables sector. “What’s possible for Intel must also be possible for our solar industry,” grumbled Saxony climate minister Wolfram Günther.

Some see the scale of the subsidies as scandalous. Sonja Álvarez, a commentator with business publication WirtschaftsWoche, pointed out that Intel is also investing $25 billion in a new Israeli plant (Israel’s biggest-ever foreign investment, according to Prime Minister Benjamin Netanyahu) but would only be getting $3.2 billion from the Israeli state—evidence, she wrote, of Israel boasting better digital infrastructure and startup ecosystems. 

“Not only did [Chancellor Olaf Scholz and Economy Minister Robert Habeck] allow themselves to be blackmailed, but they are apparently not sufficiently convinced of the attractiveness of the location themselves and have therefore resorted to expensive lures,” Álvarez wrote.

Either way, Intel’s Magdeburg plant should be operational around five years from now—its benefits can be weighed against the costs then. 

More news below.

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David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman.

NEWSWORTHY

OpenAI watered down EU regulation. OpenAI has lobbied for parts of the EU’s A.I. Act to be weakened in a bid to reduce the regulatory burden on the company. In documents about OpenAI’s engagement with EU officials obtained by Time, OpenAI proposed amendments that were then made to the final text of the EU law, which is headed for a last round of negotiations after the European Parliament approved it on June 14. In one case, OpenAI argued that the act should not label its general purpose A.I. systems like GPT-3 and image-generator DALL-E 2 as “high risk,” a classification that comes with strict legal requirements.

Hackers join protest against Reddit’s API pricing changes. Reddit told moderators that they will be removed if they continue a blackout. Now, subreddits are shifting protest plans by changing the community’s topic and having days when the community turns private. For example, members of video game storefront community r/Steam are posting about literal steam. This comes as a ransomware group known as BlackCat claims responsibility for a February phishing attack on Reddit, saying it stole 80GB of data from the discussion website. The group plans to release it publicly if Reddit fails to pay them $4.5 million and to back off on the API pricing changes set to go into effect in the coming weeks. The Verge reports that while the group says it has access to internal documents and data, like contact information for employees and advertisers, Reddit says the hackers didn’t access nonpublic user data.

Creators move from Twitch to Kick. Streaming platform Twitch has made recent changes that significantly decrease revenue sharing for creators, some of whom found a new home for their content on a platform known as Kick, as Fortune’s Alexandra Sternlicht reports. Officially launched in March, it allows creators to keep 95% of their subscription revenues and has employed a loose approach to content moderation, drawing critics. Still, the platform is nabbing big names like Felix Lengyel, a top Twitch gamer known as xQc who signed a two-year contract with Kick worth up to $100 million. But Twitch is still making a bid for creators by announcing its Partner Plus program, which restores a 70/30 split for top-tier creators for earnings up to $100,000. Streamers quickly blasted the offer given its limited eligibility and the various terms and conditions.

ON OUR FEED

“Apple didn’t invent apples…We have been around for 111 years. And I think apples have been around for a few thousand more.”

—Fruit Union Suisse director Jimmy Mariéthoz, talking to Wired about worries Switzerland fruit farmers have over potentially having to change logos as tech giant Apple tries to gain intellectual property rights over depictions of the fruit. In 2017, Apple submitted an application to the Swiss Federal Institute of Intellectual Property requesting the IP rights for a realistic, black-and-white depiction of Granny Smith apples. After it was partially granted last fall, Apple appealed. Now, Fruit Union Suisse says, there hasn’t been clarity on what uses of the apple shape the tech company will try to protect.

IN CASE YOU MISSED IT

New recall notices for Tesla’s electric-powered truck suggest it may have produced as few as 36 units in 3 months, by Nicholas Gordon

Spotify exec Bill Simmons blasts Prince Harry and Meghan Markle as ‘grifters’ after their $20 million Archetypes podcast is axed, by Orianna Rosa Royle

Wharton professor says employees are hiding A.I. use—and potentially transformative productivity gains—from employers, by Steve Mollman

Xi Jinping calls Bill Gates an ‘old friend’ as he welcomes him to China—as Beijing matches his foundation’s $50 million gift to Chinese research, by Rachel Shin

Elon Musk ‘didn’t think anyone would actually agree’ to A.I. pause he called for, by Steve Mollman

BEFORE YOU GO

New materials can transform light. A group of scientists and engineers has created a new class of materials that can absorb low-energy light and make it higher-energy light. It consists of silicon nanoparticles and organic molecules similar to those used in OLED TVs, allowing electrons to move between its organic and inorganic components.

The findings were published in Nature Chemistry last week, and the researchers say this class of materials can have applications for a slew of tech. That’s because it can turn long-wavelength photons, which travel well through tissue, fog, and liquids, into short-wavelength blue or ultraviolet photons, the type that often helps sensors work or that produces a wide range of chemical reactions. So the material could be useful for bioimaging, light-based 3D printing, and light sensors that can be used to help self-driving cars travel through fog. Sean Roberts, an associate professor of chemistry at the University of Texas at Austin, said the discovery offers a whole new way of designing materials. “This concept may be able to create systems that can see in near infrared,” Roberts said. “That can be useful for autonomous vehicles, sensors, and night vision systems.”