.

The federal government is now Intel’s largest shareholder after President Donald Trump signed off on a deal giving the U.S. government a 10% stake in the struggling American chipmaker. Trump is taking the federal government further into the private sector than it’s ever been before, doing so in a way that defies decades of Republican economic orthodoxy and has already incited a fierce backlash from conservatives who usually support him.

Trump brushed aside the criticism in an interview, touting the deal as “one of the smartest” things he had ever done and predicting it would make the U.S. “richer and richer.” He’s also made clear that it’s just the start: “I hope I’m going to have many more cases like it,” Trump said. For Trump, that means an approach that closely resembles what economists used to call industrial policy — an economy in which the government acts as an active participant, making investments to shape industries rather than just providing private businesses with subsidies and then leaving them alone.

The question is whether the president is also crossing a line into socialism. For generations of economists, a central tenet of socialism was government control of the means of production for the public good. By that standard, Trump’s decision isn’t all that different from what the governments of China or Russia do all the time.

The political hypocrisy is also notable. When former President Barack Obama acted to take over Chrysler and General Motors in the 2008–9 financial crisis, conservatives characterized the move as an emergency, a necessary step to prevent iconic American companies from vanishing forever. If Obama had taken a 10% stake in Intel, Trump allies told the Washington Post, conservative media would have screamed that he was turning the country communist.

Trump has argued it’s different this time. In the interview with Schapira, he was at pains to frame the Intel stake as an investment, rather than a bailout or even a concession. Trump noted that he converted nearly $9 billion in grants (cash that the government was already committed to giving the company under President Joe Biden’s bipartisan Chips Act) into equity for the U.S. government. Trump then essentially sold the company to the U.S. government for its full book value, generating $10 billion to $11 billion in net value for taxpayers from the get-go. “Why are ‘stupid’ people unhappy with that?” Trump said.

The criticism has still been sharp from leading conservatives. Larry Kudlow, who was Trump’s top economic adviser at the start of his term, said on Fox Business that he was “very, very uncomfortable with that idea.” Steve Moore, another informal Trump adviser, was even more critical, saying, “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 conservative National Review published an editorial saying that “government shouldn’t get into the chip business.” Senator Thom Tillis warned that the deal could create a “semi-state-owned enterprise a la CCCP,” using the Russian abbreviation for the Soviet Union. Senator Rand Paul was more blunt in a series of tweets: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

It’s not all been condemnation from the right, of course. Bernie Sanders, the progressive senator from Vermont, posted a video celebrating the decision. Commerce Secretary Howard Lutnick rushed to Trump’s defense on Laura Ingraham’s show, telling her 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, for its part, published a statement last week warning of some of the complications from the deal. In a filing to the Securities and Exchange Commission, the company said the agreement could limit Intel’s ability to get government grants in the future, as well as “negatively impact our sales outside the U.S.” The filing noted the arrangement could also bring additional regulation, with the government gaining influence over Intel “throughout all levels of its business.” The new stakeholder also comes as Intel is under pressure from investors. Earlier this year, the company announced it would lay off 15% of its workforce. Intel’s market capitalization hovers around $110 billion, down 50% since the beginning of 2024. Shares of Intel, which had slumped 9% over the previous month, did pop 4% in after-hours trading after Trump’s interview was released.

The Wall Street Journal reported that Trump had demanded the resignation of Intel CEO Lip-Bu Tan for his past ties to China before a personal meeting at the White House, where he later claimed to have had a change of heart. “I liked him a lot, I thought he was very good,” Trump said later.

The deal is already raising concerns that the government will ultimately influence or try to influence the company’s decisions, even if Trump and Lutnick say it won’t. The president of the United States is the company’s largest shareholder. Skeptics of the deal point to the exchange-traded fund of Intel stocks that Trump sold to make way for the U.S. government’s stake: Although Trump may not have direct control of that money, it remains under the control of the Trump Organization, the president’s company.

The bottom line: If Intel rights the ship and bounces back, Trump will say he did that by strengthening one of the foundations of America’s technology industry. If it continues to sink, the American taxpayer will pick up the tab. And with Trump now openly promising to make similar deals with other companies in the future, there’s reason to believe it will happen.

For the time being, the Intel stake is a fundamental shift in the relationship between the federal government and private business — another step in how far Trump has remade the Republican Party’s approach to the economy.