.

The federal government is now Intel’s biggest shareholder. President Donald Trump signed off on the 10% stake in the beleaguered American chipmaker last week, part of a rescue plan that moves beyond subsidies and tax breaks and into a realm of overt government ownership that few on Capitol Hill would have imagined just a few years ago.

The Trump administration’s decision has generated a firestorm of criticism from conservatives who would normally defend the president. Trump has framed the equity stake in the corporate rescue as a savvy investment that will pay off for the U.S. government and make Americans “richer and richer.” The former president has also signaled that he may soon do more of the same, with Intel being only the first step. “I hope I’m going to have many more cases like it,” Trump said during remarks in Florida. He left no doubt that he envisions a much more muscular role for government in bolstering and guiding the country’s leading industries. “We’re taking the finest companies in the world, and we’re making them even better,” Trump said. The approach is a return to what was long known as industrial policy, which had long since fallen out of fashion in both academic economics and political practice.

Critics on the right are left to wonder whether the move tips over into socialism. Since the era of socialist planning, an important component of the definition of socialism has been government ownership of the means of production for the common good. By that measure, Trump has crossed the line, say some conservatives, and there’s nothing to distinguish his action from what we see in countries such as China or Russia.

Republicans seem to have missed the obvious irony. Back in 2008–2009, the Obama administration decided to seize control of Chrysler and General Motors. Conservative media at the time reported the action as an emergency rescue of two iconic American firms in danger of going under. But had Obama instead taken a 10% stake in Intel, conservatives now say, Fox News and other media outlets would have accused the president of communism.

Trump sees this case differently, of course, and presents the Intel stake as a bona fide investment, not a bailout. He also converted nearly $9 billion in grants to the company (already approved for the company under President Joe Biden’s bipartisan Chips Act) into a stake for the U.S. government. The former president claimed this maneuver by itself created between $10 billion and $11 billion in immediate value for taxpayers. “Why are ‘stupid’ people unhappy with that?” he asked.

Conservatives Quickly Push Back

The conservative pushback has been immediate. Larry Kudlow, Trump’s former top economic adviser, said on Fox Business, “I was very, very uncomfortable with that idea.” Steve Moore, an informal adviser to Trump, was even more withering. He told reporters, “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 at National Review published an article suggesting that “government shouldn’t get into the chip business.” Senator Thom Tillis sounded the alarm on social media about the deal turning Intel into a “semi-state-owned enterprise a la CCCP.” The former senator from North Carolina was referring to the Soviet Union, known by that acronym. Senator Rand Paul made a similar point a few days later in his own tweet: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

Intel Chipmaker Issues Warning, Stocks Fall 5%

But not everyone is in the thrall of the condemnation. The progressive Senator Bernie Sanders, for instance, came out in support of Trump’s decision. Sanders sees this and similar moves as evidence of the power government has to shape the industry for the greater good. Howard Lutnick, the commerce secretary under Trump, rushed to the defense of the former president, telling Laura Ingraham, “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 did not comment on Trump’s tweet. But the company issued a warning in an SEC filing last week, suggesting the arrangement would hurt its prospects. The stock purchase, Intel said, “may negatively affect our ability to receive future grants, impair our sales to and business reputation with certain customers, particularly international customers, and subject our business and financial results to greater government scrutiny.” Intel, under pressure, had announced plans earlier this year to lay off 15% of its workers. The company has a market cap of around $110 billion, which is down 50% since the start of 2024, but the stock rose 4% in the immediate aftermath of Trump’s tweet.

The Wall Street Journal reported that Trump at first demanded the resignation of Intel CEO Lip-Bu Tan over past connections with the Chinese government. He relented after meeting with Tan at the White House, the Journal reported. “I liked him a lot, I thought he was very good,” Trump said of Tan after the meeting.