The United States government’s recent acquisition of a 10 percent stake in Intel, one of the country’s largest semiconductor manufacturers, has ignited a political and economic firestorm that cuts across traditional party lines and raises fundamental questions about the future of American industry. The deal, announced on Monday, August 25, 2025, by President Donald Trump’s administration, is being hailed by some as a bold step to secure national interests in a world increasingly defined by technological competition. Others, however, see it as a dangerous flirtation with state intervention that threatens the bedrock of free-market capitalism.
Commerce Secretary Howard Lutnick, a central figure in the administration’s economic strategy, took to Fox News’s “The Ingraham Angle” to defend the Intel deal against a wave of criticism from within the president’s own party. Senator Rand Paul, a longtime champion of limited government, condemned the move as a “terrible idea” and “a step toward socialism.” Lutnick was quick to push back, arguing, “I think he’s got it backwards.” He pointed out that Congress had previously awarded Intel approximately $11 billion in federal subsidies under President Biden’s administration, and that the CHIPS and Science Act—which paved the way for such investments—passed with the support of 17 Senate Republicans and 24 House Republicans. “Come on, let’s take care of the American taxpayer,” Lutnick insisted. “That is not socialism. I will tell you what that is. That’s the best businessman in the United States of America in the Oval Office doing fair things for us.”
Yet, not everyone on the right is convinced. Senator Thom Tillis voiced his discomfort with the government’s new role in corporate boardrooms, telling journalist Major Garrett, “That starts feeling like a semi state-owned enterprise a la CCCP.” Former Vice President Mike Pence echoed these concerns, telling Bloomberg he has “great concerns” about the government holding “golden shares” in companies like Nippon Steel or Intel. Larry Kudlow, who led Trump’s National Economic Council during his first term, was even more blunt, declaring on Fox Business that he was “very, very uncomfortable” with the government taking a 10 percent stake in Intel.
Meanwhile, some on the left see the move as a long-overdue correction to years of what they call corporate welfare. Senator Bernie Sanders, a self-described democratic socialist, has applauded the deal, arguing, “Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return.” Sanders went further, stating that American taxpayers “have a right to a reasonable return” on the subsidies they have provided to Intel and other domestic chip-making companies. The Wall Street Journal noted that the president’s Intel move “blurs party lines on economic intervention,” with many GOP lawmakers in opposition and some on the left urging the White House to go even further.
For the Trump administration, the Intel deal may be just the beginning. Commerce Secretary Lutnick revealed on CNBC’s “Squawk Box” that military leaders in the White House are actively considering acquiring equity stakes in major U.S. defense contractors, including Lockheed Martin—a company that derives 97 percent of its revenue from the federal government. “There’s a monstrous discussion about defense,” Lutnick said, suggesting that the Pentagon could soon own large chunks of defense companies that are “basically an arm of the U.S. government already.” He pointed to international precedents, such as the UK’s nationalization of British Steel and the heavy subsidization of key industries in Japan and Europe, as evidence that the U.S. should not shy away from similar strategies to remain competitive on the global stage.
The administration’s rationale is partly rooted in national security. Influential tech analyst Ben Thompson argued that the U.S. government’s stake in Intel is a strategic move to reduce America’s dependence on foreign chip manufacturers, particularly Taiwan’s TSMC, which is seen as vulnerable to Chinese influence. “At the end of the day, it seems reckless for the US to place both its national security and its entire economy in the hands of foreign countries next door to China,” Thompson wrote, suggesting the risks of not supporting domestic chipmakers outweigh the ideological discomfort of government ownership.
President Trump himself has made no secret of his ambitions to expand this new approach. Speaking to reporters, he likened the Intel deal to a real estate transaction, explaining, “As a real estate person, if I have an agreement and I have any form of a stop gap where I can stop somebody from doing something—I have a covenant in an agreement and they come to me and they say I would like to do something but you have us restricted—if I do that, they usually have to pay.” Trump indicated he intends to pursue “many more” deals acquiring stakes in other major companies, stating his goal is to “get as much as I can.”
Not all voices in the business community are on board. Kevin O’Leary, the outspoken host of “Shark Tank” and a frequent supporter of Trump’s economic policies, lambasted the Intel decision as “abhorrent” and a “really, really bad idea.” Appearing on Fox Business, O’Leary argued, “We let good companies thrive and then when companies fail, they die like a slug at the bottom of the ocean and the protein gets reabsorbed by private equity into the winning management teams.” He insisted that Intel “lost its way a decade ago” and should have been sold off in pieces, not propped up by taxpayer dollars. “Intel is a dog. I would never put my own money into it, and I’m glad I didn’t, it is where money goes to die and I certainly don’t want to put my tax dollars into it, being force-fed a loser,” O’Leary said, adding, “Let it die. It is a grandmother on life support. It wants to die. Other people want to purchase the pieces that are left.”
National Economic Council Director Kevin Hassett, however, painted the Intel stake as “more like a down payment on a sovereign wealth fund,” hinting at a broader strategy to build up government assets in key industries. “The president has made it clear all the way back to the campaign that he thinks that in the end, it would be great if the U.S. could start to build up a sovereign wealth fund, and so I’m sure that at some point, there’ll be more transactions if not in this industry in other industries,” Hassett said on CNBC.
As for what comes next, the administration’s willingness to break with decades of economic orthodoxy has left both supporters and critics scrambling to recalibrate. Michael R. Strain, an economist at the right-leaning American Enterprise Institute, told the New York Times, “I think what we’re seeing is less a strategic, thoughtful shift toward state capitalism and more an opportunistic display of corporate shakedowns. Either way, this does create significant risks for the companies that are entering into these deals, and for the long-term prosperity of the American people.”
With the president openly declaring his intention to pursue equity stakes in other major industries, and with both the left and right offering up surprising new alliances and divisions, the United States appears poised at the threshold of a new era in economic policy—one where the old rules may no longer apply, and where the government’s role in the marketplace is up for grabs.
