The results of initial chip formation demonstrate a very complex interaction between metal chip and rake face of the cutting tool. These complex interactions can impart a sophisticated internal microstructure where grains are strained with nanometer dimensions. Plastic shear strains between two and ten result in the creation of nanostructured grains that are between 45 nm and 150 nm in diameter depending upon the material strained and the magnitude of shear strain. This paper describes how the contact conditions between chip and a negative rake angle cutting tool can control the internal microstructure of the metal chip in order to produce a nanostructured metal. Metal chips produced can act as feedstock for secondary manufacturing processes that produce engineering components that have superior mechanical and physical properties compared to cast and wrought materials.