.

President Donald Trump has made the federal government Intel’s biggest shareholder by giving the U.S. a 10% stake in the beleaguered American chip giant. It’s a move that’s long been considered anathema to Republican economic orthodoxy — and one that’s met with criticism even from conservatives who normally support the president.

“It’s stupid,” Trump himself said in an interview. But he also promised it’s only the first of many such moves, as he turns toward an economic approach once known as industrial policy: the direct government intervention and investment to help build and run key parts of the U.S. economy.

The Intel deal marks “crossing the line into socialism,” said Daniel Gross, a conservative commentator and former Bush White House aide, writing on the Progressive Economics blog. For more than a century, that word has meant in part government ownership of the means of production for the people, he noted. “On that definition, Trump just signed an executive order turning the U.S. into a capitalist version of Russia or China.”

The irony for conservatives is palpable. When Obama took over Chrysler and GM, he got scolded and skewered by conservatives for nationalizing those iconic U.S. companies. “If Obama had taken 10% of Intel, we would have been screaming communist/socialist,” says Ali Alexander, a Trump adviser. The difference, Trump says, is that this isn’t a government takeover but an investment. He turned nearly $9 billion in Intel grants (money the Biden administration had already given the company under his bipartisan Chips Act) into government equity in the company, Trump said, meaning the U.S. government “created $10 billion to $11 billion worth of value overnight, to the taxpayers.”

“The US Government just took a 10% stake in Intel in the private sector. Is this a step in the direction of socialism?”

Larry Kudlow, Trump’s former top economic adviser, said in an interview on Fox Business that he was “very, very uncomfortable with that idea.” Informal adviser Steve Moore was even 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.”

Editorials have warned against “government getting into the chip business,” and a National Review essay noted: “Intel is going to be a laboratory for how to screw it up” when the government tries to be in business. “There would be great, great resistance” to such a move from the Biden White House, said Sen. Thom Tillis (R-NC). It risked creating a “semi-state-owned enterprise a la CCCP,” he said, meaning the former Soviet Union. Senator Rand Paul (@RandPaul) May 7, 2024

Sen. Bernie Sanders (I-VT) was, as you might expect, thrilled, pointing out that the federal government used its position to get something back in return from Intel in return. “You know what I like about it?” Trump said on his radio show. Commerce Secretary Howard Lutnick went to work on Laura Ingraham’s show. “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 hasn’t been enthusiastic, either. In a regulatory filing, it said the agreement “could adversely affect” its ability to win future government grants, make it harder to sell overseas, subject it to more regulation, and even conflict with its bylaws and charter. The company has already been in crisis: It plans to lay off 15% of its workforce, has been flailing for more than a year, and announced the job cuts and a disappointing outlook in February. Intel has a market value of about $110 billion but has lost about half its value since the start of 2024, before gaining 4% Friday after Trump’s announcement.

That was before Trump met with him at the White House. “I liked him a lot, I thought he was very good,” he said. pic.twitter.com/zBe4Ue92s9

Trump is still the U.S. government’s non-voting shareholder, with no apparent desire to exercise his influence. The president’s words aside, that promise will be hard to keep when the leader of the United States is also its biggest shareholder. And the company, which seemed to be trading on hopes of becoming a chipmaker in the U.S. government’s pocket, may not be so lucky. As the company itself said in its SEC filing, “Our ability to implement our business strategy may be affected by new regulatory requirements and restrictions imposed by the government as a result of its increased ownership position.”

It will depend on how Intel’s business fares under Trump’s stewardship: If the U.S. investment turns Intel around, Trump will take credit for national industry, and future presidents will want to follow his lead. If Intel’s fortunes don’t recover, taxpayers are on the hook. But as Trump has promised other such arrangements in the future, and with him already outspending his Republican rivals in 2024, there will be more such moves. That is, if he wins. If Biden is reelected, his position would change: Ownership by the American people, not socialism.

In the meantime, he will have made the Republican Party at least a little bit different. It remains to be seen if there will be anyone on the right still willing or able to govern as before.