Nine months ago, the U.S. took a stake in a struggling chipmaker. Most investors barely cared.
Intel had been flat for years, so the deal looked like a bailout. Then the chart went vertical.
The stock is now up more than 300% since the August deal. That turns the government's 9.9% stake into one of the best public-sector trades in years.
Trump told Fortune this week that he met with Intel CEO Lip-Bu Tan. He asked for "10% ownership for free," and Tan agreed on the spot.
The president told the magazine he should have asked for more. The mechanics behind the deal were simple.
Commerce turned $5.7 billion in unpaid CHIPS Act grants into Intel shares. It then added $3.2 billion in other awards on top.
In short, the U.S. swapped a check it had not yet written for stock in a firm on its back foot. Then demand for Intel's main product came roaring back.
We break down the trades reshaping the chip space every morning in Market Briefs, where you also get a free investing masterclass when you sign up.
For years the AI boom was about Nvidia's GPUs. Those are the chips that train large AI models.
Intel makes CPUs. Those are the chips that run everything else in a server.
The market had written them off as old news, and that call aged badly. Bank of America now thinks the CPU market could more than double by 2030.
Nvidia echoed the shift in March, telling CNBC that CPUs have become a bottleneck for AI work. Tan said on Intel's last call that demand for its data center CPU is running ahead of supply.
The stock followed the demand. April was Intel's best month on the Nasdaq in 55 years, with the stock more than doubling.
Apple and Intel struck a preliminary deal for some Apple-device chips. Elon Musk added in April that he plans to use Intel chips for Tesla's $119 billion Terafab project.
Those two deals matter for a simple reason. They turn the government's stake from a one-off rescue into a story about real customer demand.
Trump's "should have asked for more" line is half regret, half message. The U.S. now owns a piece of a key chipmaker as it tries to take on China.
The next time a national-champion firm asks for federal cash, the price tag may include a slice of the cap table. That changes the rules of the game.
For now, a check the U.S. had already promised to write turned into the best chip comeback story of the cycle.
The next earnings call will be the first real test of the rally.
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