After Nvidia deal, the US government has made a roughly $4.5 billion paper profit on its Intel stake in less than a month
The government has returned roughly 51% on the investment since announcing it August 22.
Intel is soaring Thursday morning on the announcement of a partnership with stock market behemoth Nvidia. One of the biggest beneficiaries? The US government.
Just last month, the government took a huge stake in Intel, saying it was seeking to “create the most advanced chips in the world” and protect national security.
With Thursday’s announcement and the ensuing stock surge, the government is now up 51% on its investment, for a paper profit of roughly $4.5 billion as of 9:40 a.m. ET.
If you’re wondering how the math works out, last month the Trump administration announced it took a 433 million-share stake in Intel at $20.47 a share, via some nontraditional funding sources like unpaid grants from the Biden administration’s US CHIPS and Science Act. When it was taken, the stake was worth nearly $9 billion. As of writing, it was worth $13.4 billion.
There was no mention of any Trump administration involvement in the deal announcement, but both companies’ CEOs have cozied up to President Trump in recent months, so it’s hard to imagine the government wasn’t at least aware of discussions. Jensen Huang, Nvidia’s CEO, was at a big who’s who dinner with Trump in the UK just yesterday.
How does this compare in the halls of governmental profits made on public company investments, you ask? (OK, maybe you didn’t ask, but I was curious.) After the government swooped in to rescue banks and automakers during the financial crisis, the US Treasury booked just over $15 billion in profit over the span of about six years via the government’s Troubled Asset Relief Program, better known as TARP. Through that program, the government wound up pumping money into JPMorgan, Citigroup, Bank of America, AIG, General Motors, Chrysler, and many other companies, most of them banks.
There aren’t many other examples of this in recent history because the government typically takes stakes in public companies only during times of distress. But that sure seems to be changing under the Trump administration — the government took what it calls a “golden share” as part of its approval for the merger of US Steel and Nippon Steel. It also negotiated taking a 15% cut of some chipmakers’ revenue on chips sold in China, including Nvidia.
And the administration says more government ownership of publicly traded companies could come.
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