August 26, 2025

Hold on tight! President Donald Trump is cooking up a storm by betting the U.S. government will buy shares in healthy American companies. The big headline? A nearly 10% stake in Intel, announced last Friday, where government grants turn into equity. Trump told reporters, “I hope I'm going to have many more cases like it.” This flips decades of tradition, where the government only picked stakes in companies during big crises like in 2008. Intel might be facing challenges, but it’s no small fry—holding $9 billion in cash and worth $105 billion on the market. Some folks worry this new government role could slow down business agility and mark a shift away from pure capitalism. Bill George, former Medtronic CEO, said, “We're moving from a pure capitalistic economy to a much more state-engaged economy... That's a huge change for America and over where we've been. I've never seen an era like this.” Trump isn’t stopping with Intel. He floated helping other companies make similar "lucrative" deals with states but didn’t share details yet. Experts like Columbia’s Shivaram Rajgopal say it might actually be smart, pointing out how giants like Amazon thrived with special tax breaks. He asked, “Why is taking a 10% equity stake in Intel any worse?” But wait, the Intel file itself warns: government ownership could hurt overseas sales or make future grants trickier. Intel CEO Lip-Bu Tan chimed in, “I don't need the grant,” but said he looks forward to having the government as a shareholder. Not everyone is happy. Kentucky Senator Rand Paul called it “a terrible idea” and questioned if it pushes America closer to socialism, saying, “If socialism is government owning the means of production, wouldn't the government owning part of Intel be a step toward socialism?” Experts also wonder if this means the government might “encourage” customers to buy Intel products, stirring questions on fair play. Intel is just the start. The White House also grabbed a “golden share” giving it say in U.S. Steel after a Japan deal, took stakes in rare earths firm MP Materials, and brokered chip revenue deals tied to China sales with Nvidia and AMD. Kevin Hassett, Trump’s economic advisor, hinted more companies might see government stakes soon. Some say it's a slippery slope turning public companies into state-controlled ones under the "national security" banner. Douglas Chia, an independent consultant, warned about this shift. Trump's watchful eye isn’t limited to huge deals. He praised American Eagle’s edgy ad, pushed Goldman Sachs to fire an economist, and keeps meeting big CEOs regularly. Yet, trade policies burden many companies, frustrating industry groups. One fun moment: Apple’s CEO Tim Cook gifted Trump a golden plaque as thanks. Apple is investing around $600 billion in the U.S., aiming to move production from China to places like India—a move Trump both supports and criticizes. In this new game, companies must ask themselves, just how much control and ownership are they ready to let the government take? Harvard’s Bill George nails it, “I think companies are just starting to realize, how much control do you want to give up and how much ownership do you want to give up to the government?” Buckle up — the dance between Corporate America and the U.S. government just got a lot more interesting!

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Tags: Donald trump, Intel, Government investment, Us economy, Chipmaking industry, Corporate america,