The two American chipmakers will partner to make personal computer and data centre chips, in a lifeline for Intel as it struggles to profit from the AI boom.
President Trump earlier said the company's CEO agreed to the deal in a recent meeting at the White House.
The potential deal could involve swapping government grants for shares in the chip making giant.
The announcement comes hours after reports that the White House is in talks over taking a 10% stake in Intel.
The reports emerged a day after a meeting between the Intel boss and Donald Trump.
The unusual demand adds to challenges facing the firm, which has been seen as falling behind in the chip race.
Several firms have cut their profit forecasts or withdrawn them citing economic uncertainty.
Computers built like brains could be much more energy efficient than current designs.
The US is making it tougher for companies like Nvidia, AMD and Intel to sell existing or new chips to China.
