- calendar_today August 23, 2025
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The federal government is now Intel’s largest shareholder after President Donald Trump signed off on a 10% stake in the beleaguered American chipmaker. The move represents a sharp break with Republican economic orthodoxy and has prompted an unusual wave of scorn from conservatives who typically support the president.
Trump, meanwhile, has promoted the deal as a savvy investment that will make America “richer and richer.” He’s also suggested that Intel is just the first step. “I hope I’m going to have many more cases like it,” Trump said in an interview on Wednesday, previewing an approach that sounds a lot like what economists once called industrial policy. In other words, the government as market maker: a direct and hands-on backstop for industries that Trump deems vital to the nation’s future.
The question many are now asking is whether this decision crosses the line into socialism. For generations, one of the definitions of socialism has been the government’s direct control of the means of production, to be used for the benefit of society. By that definition, critics say, Trump’s action is only different in degree, not kind, from what happens in China or Russia.
The move is the ultimate in political irony. When former President Barack Obama sought to take control of Chrysler and General Motors at the height of the 2008–2009 financial crisis, conservatives were almost universally in agreement that it was an emergency, damage-control intervention needed to save American icons. But if Obama had sought a 10% stake in Intel, Trump allies say, conservative media would have accused him of trying to build communism in America.
Trump has argued that this case is different and that his intervention in Intel should not be seen as a bailout. He noted during his press conference on Wednesday that he had essentially converted nearly $9 billion in grants (that is, money already allocated to the company under President Joe Biden’s bipartisan Chips Act) into equity for the U.S. government. By swapping grants for a share of ownership in Intel, Trump said, he had created $10 billion to $11 billion in “value” for the taxpayer, on day one. “Why are ‘stupid’ people unhappy with that?” the president asked.
The reaction from conservative opinion leaders was swift. Trump’s former top economic adviser, Larry Kudlow, told Fox Business he was “very, very uncomfortable with that idea.” Steve Moore, another Trump informal adviser, was more blunt: “I hate corporate welfare. That’s privatization in reverse. We want the government to divest of assets, not buy assets. So terrible, one of the bad ideas that’s come out of this White House.”
The editorial board of National Review published a piece warning that “government shouldn’t get into the chip business.” Senator Thom Tillis said in a statement that he was “troubled by the risks of creating a semi-state-owned enterprise a la CCCP” (that’s a reference to the former Soviet Union). Senator Rand Paul followed up on that point in a tweet of his own: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”
But not everyone was critical. Progressive Senator Bernie Sanders said in a statement that the decision was a “big step in the right direction.” Commerce Secretary Howard Lutnick rushed to Trump’s defense on Laura Ingraham’s show, saying, “That is not socialism. That’s the best businessman in the United States of America in the Oval Office doing fair things for us.”
Intel itself has argued that the deal will bring complications. The company’s required SEC filing about the deal acknowledged that the new arrangement “may negatively impact” its ability to receive future government grants; that it will likely “diminish” Intel’s ability to sell products globally; and that it “could subject us to additional regulation and oversight by the government.” Intel, which last month announced that it would cut 15% of its workforce, now has a market cap of about $110 billion, or down 50% so far in 2024. (Its shares were up 4% on Trump’s announcement.)
Trump demanded the resignation of Intel CEO Lip-Bu Tan earlier this week, in part because of past connections to China. But after a one-on-one meeting in the Oval Office, Trump relented. “I liked him a lot, I thought he was very good,” Trump said.
It’s worth noting that the White House has promised that the U.S. government will not seek to block any business decisions or become an activist shareholder at Intel. The federal government is only a non-voting shareholder, and government officials have pledged not to interfere with day-to-day decisions. It is, of course, a non-binding promise. The president of the United States is now Intel’s largest shareholder, so it’s unlikely he will not have some influence.
If Intel stabilizes and recovers, Trump will claim credit for shoring up one of the foundations of America’s technology industry. If it fails, taxpayers are on the hook. In the meantime, Trump has openly promised to do many more of these, and the fight over whether this is socialism, or capitalism, or simply Trumpism is only just beginning.
At the least, the stake in Intel has created a whole new relationship between the federal government and private business and illustrated just how far Trump has bent the Republican Party away from free market economics.
