The US government's 9.9% stake in Intel, acquired last August for $8.9 billion via conversion of CHIPS Act grants and Secure Enclave funds, is now valued at approximately $36 billion. This represents an unrealized gain of $26.5 billion, or a 300% return in eight months, making it one of the most profitable government investments in American industrial history.
This investment was an accidental outcome of political opportunism. The Trump administration, opposing conditions of the CHIPS and Science Act, converted $5.7 billion in unpaid CHIPS Act funds and $3.2 billion from the Secure Enclave defense program into an equity stake, rather than disbursing remaining grants. This move was framed as fiscal discipline rather than industrial strategy. Senator Elizabeth Warren criticized it as handing "billions of dollars to Intel, with no meaningful strings attached." The government holds no board seat and has agreed to vote its shares in alignment with Intel’s board, acting as a passive investor.
Intel's recent turnaround under CEO Lip-Bu Tan, who took over in March 2025, has driven the stock surge. The company has beaten earnings expectations for six consecutive quarters. In the first quarter, revenue was $13.6 billion, 10% above consensus, and adjusted earnings per share reached $0.29, significantly higher than the $0.01 expected by analysts. Data center and AI revenue increased 22% year over year to $5.1 billion. Intel's stock is up over 80% year-to-date in 2026, building on an 84% rise in 2025.
The deal also structured a five-year warrant for an additional 5% of Intel shares at $20, exercisable only if Intel sells majority control of its foundry business, serving as a poison pill to maintain American ownership of domestic chip manufacturing. President Trump, who had previously called the CHIPS Act "a terrible deal," reportedly secured this deal with Intel CEO Lip-Bu Tan, ensuring Intel received about $10 billion in funds and the US government became a major shareholder.
