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President Donald Trump just turned the federal government into Intel’s largest shareholder by approving a 10% stake in the beleaguered American chipmaker.

The move is a stunning reversal of Republican economic orthodoxy that has already drawn harsh criticism from conservatives who typically support Trump. It is also an acknowledgment that his own rescue of Intel, one of the crown jewels of the American tech industry, will define his legacy on technology policy.

The president was true to form. Calling it a “good investment,” Trump said the decision will make America “richer and richer” while hinting that Intel is just the first of many. “I hope I’m going to have many more cases like it,” he added.

As the details of Trump’s order emerged, many observers noted that it resembled an approach to economic policy that used to be known as industrial policy — that is, a government that actively shapes and supports a nation’s most important industries.

It also left many wondering whether the move is socialist. A case can be made, critics note, that socialism is any instance in which the government takes ownership of the means of production for society’s benefit. By that definition, the president’s order is no different from what the government of China or Russia might do.

“If you like American capitalism, this is not a good sign,” quipped Stephen Moore, a conservative economist who was a top informal economic adviser to the Trump White House. “Donald Trump is deciding which companies are winners and losers based on his political objectives. It is privatization in reverse.”

The case of Trump and Intel is a kind of political poetry, given what happened just a decade earlier. When Barack Obama sought to take control of Chrysler and General Motors in 2008–2009 to head off the financial crisis, conservatives accepted the move as an emergency rescue of two American icons that had to be done.

Yet conservative radio, television, and social media all would have exploded in outrage had Obama instead sought to take a 10% stake in Intel, insisted Trump allies privately. And in fact, the New York Times reported recently that the Trump White House considered intervening with loans and equity to prevent companies like GE and IBM from going under.

What is different in the case of Intel is that Trump is presenting it as an investment, not a bailout. Trump converted nearly $9 billion in grants, money already committed to the company under President Joe Biden’s bipartisan Chips Act, into a direct equity stake for the U.S. government. This, he said, allowed him to extract between $10 billion and $11 billion in immediate value for taxpayers. “Why are ‘stupid’ people unhappy with that?” he asked.

Congress, Business Groups React

Conservatives are having none of it. Larry Kudlow, Trump’s top economic adviser in the White House, said on Fox Business that the idea made him “very, very uncomfortable.” Steve Moore, another unofficial Trump adviser, went further, telling CNBC that “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.”

National Review editorialized that “government shouldn’t get into the chip business.” Thom Tillis, a Republican senator, called the move “alarming” and warned it risks creating a “semi-state-owned enterprise a la CCCP.” That is a reference to the Soviet Union, the initials of which in Russian were CCCP.

Senator Rand Paul of Kentucky took the point on Twitter: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

Not all are against the move, of course. Bernie Sanders celebrated the decision as another example of government power that can be used to advance society’s interests. Commerce Secretary Howard Lutnick flew to Trump’s defense, telling Laura Ingraham that “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’s Take on Trump Order

Intel is hardly pleased. In an SEC filing ahead of the Trump announcement, the company warned that the decision could limit its ability to receive future government grants, hamper global sales, and increase government regulation of the company. Intel, which had earlier announced plans to lay off 15% of its employees this year, said that U.S. government ownership would limit the company’s ability to “attract investment” and have a “negative impact” on the business.

Intel’s market valuation is around $110 billion, down 50% from the start of 2024. (Shares were up 4% at one point on Friday after the news of the Trump decision.)

The Wall Street Journal reported that Trump initially demanded the resignation of Intel CEO Lip-Bu Tan for past links to China. He rescinded the order after meeting the executive at the White House. “I liked him a lot, I thought he was very good,” Trump said afterward.

The White House notes that the U.S. government will not be an Intel voting shareholder, and Trump says he will let management and the board of directors run the company. Whether this will really be the case when the president of the United States is Intel’s largest shareholder is an open question.

The Bottom Line

In one sense, we won’t know for a long time whether the Trump decision is a smart one. If Intel stabilizes and turns around, Trump will get the credit for shoring up a major American tech icon. If it goes under, the taxpayer will pay the bill.

But with Trump already hinting that he will seek other such arrangements, the question of whether this is socialism, capitalism, or Trumpism is unlikely to go away. At the very least, the decision makes the U.S. government an equity investor in the modern-day American economy on a scale not seen since at least the Reagan administration, a remarkable turn for an administration that often championed a more laissez-faire approach to markets.