Trump's Intel stake sparks cries of 'socialism' from his party, but he
vows more deals are coming
[August 27, 2025] By
BERNARD CONDON
NEW YORK (AP) — Donald Trump has a message for critics who think turning
the U.S. government into a major stockholder of Intel is a “socialist”
move: More is coming.
“I will make deals like that for our Country all day long," the
president posted on Truth Social after critics piled on, adding later
about future ownership stakes, “I want to try and get as much as I can."
One possible target: defense contractors, whom Commerce Secretary Howard
Lutnick told CNBC Tuesday were ripe for the picking given the U.S.
government is a big customer.
Free-market conservatives were already wary of Trump's tendency to
interfere in corporate decision-making by, for example, telling Apple
where it should make iPhones, or even demanding a cut of Nvidia's sales
of chips to China. But the Intel move is a startling defiance of
Republican orthodoxy that says governments shouldn't try to pick
corporate winners and losers and risk messing things up as owners by
rewarding executives for politically smart but financially stupid
decisions.
The U.S. government is getting a 10% stake in Intel through the
conversion of billions in previously granted government funds and
pledges, making it one of Intel's largest shareholders.
“If socialism is government owning the means of production, wouldn’t the
government owning part of Intel be a step toward socialism?" Republican
Sen. Rand Paul said in a post on X. “Terrible idea.”
Scott Lincicome, a Cato Institute trade expert, says Intel could end up
making decisions now to please Trump even if they're impractical, say,
by going ahead with plans to open a long-promised chipmaking factory in
Ohio. And even short-term gains from government ownership, such as more
companies buying Intel semiconductors, will hurt business in the end by
saddling those companies with inferior chips.
“Intel might simply gain customers from folks that are looking to stay
on Trump’s good side," he said. “But innovation requires ruthless
competition, an endless drive for an advantage — and now they might
accept a disadvantage because they need the political win.”
Many Republicans remained silent on the issue, prompting others to
suggest they are free market hypocrites.
“For so many of my self-described true conservatives, you’re going to
have to explain to me how this reconciles with true conservatism and
true free-market capitalism,” Republican North Carolina Sen. Thom Tillis
told CBS in an interview. “I don’t see it.”
Early last year, the Biden administration agreed to provide Intel with
billions of dollars in funding under the CHIPS Act for it to build
semiconductor manufacturing factories around the country, part of a plan
to produce 20% of the world’s most advanced chips in the U.S. by 2030,
up from zero at the time.
Trump argues that he got the Intel stake for free by converting $11.1
billion of funding into the equity stake. He also notes that Intel
shares shot higher after he struck the deal Friday, handing a big win to
U.S. taxpayers.
“I love seeing their stock price go up, making the USA RICHER, AND
RICHER,” Trump posted Monday morning before the stock trading began.
“More jobs for America!!! Who would not want to make deals like that?”
The price of Intel stock fell slightly both Monday and Tuesday, and
investors have reason to be cautious.
In a filing to its investors after the deal was announced, Intel warned
that it may lose overseas customers reluctant to buy from a U.S.
government-owned business. The company has lost more than $22 billion
since the start of 2023 after largely missing out on the frenzy
surrounding artificial intelligence.
James Secreto, a former Biden administration official who helped hammer
out the CHIPS Act grants, said a falling stock price is a big danger
given Trump's tendency to measure his success and failure by gyrations
in the public market and his willingness to jawbone companies to do
things to help him politically.
“The Trump administration now owns Intel’s success or failure," said
Secreto, former Commerce Secretary deputy chief of staff. “The next
question is how far will the U.S. government go to defend its equity
position?
[to top of second column] |
President Donald Trump speaks during a meeting with South Korean
President Lee Jae Myung in the Oval Office of the White House,
Monday, Aug. 25, 2025, in Washington. (AP Photo/Alex Brandon)
 He called the Intel stock purchase a
“bridge too far" even for Democrats who believe government help is
needed occasionally.
“For the sake of national security, we still need Intel to win on
performance, not politics," he said.
That Trump would be labeled a “socialist” by members of his own
party is ironic given that he has long wielded that term against his
opponents.
Yet in some ways the Intel move fits a pattern.
Trump has erected the highest tariffs in decades, a trading strategy
that his party has long rejected, and has tried to influence
corporate decisions the GOP used to say were best left to business
owners. In addition to telling Apple not to shift production to
India, he has gotten Coca-Cola to change ingredients and warned
Walmart not to raise prices.
There have also been a series of moves that will directly benefit or
hurt the government depending on how businesses perform.
In June, Trump struck a deal approving Nippon Steel’s takeover of
U.S. Steel in exchange for a “ golden share ” that essentially gives
the U.S. government veto power to ensure national security interests
are protected against cutbacks in steel production. In July, he
spent $400 million of taxpayer money on MP Materials stock to make
the U.S government the biggest owner in the Las Vegas rare earths
miner. Then earlier this month came his deal with Nvidia and AMD to
give the U.S. government a 15% cut of revenue from selling certain
chips to China.
A White House official who spoke on condition of anonymity to
describe internal deliberations said the deals with Intel, Nvidia,
and U.S. Steel are seen as one-offs, necessary moves because the
companies have outsized importance to the country’s national
security. The source likened the deals to the government's departure
from free market principles when it limits American aerospace
companies from selling fighter jets to countries like China.
Some conservatives aren't buying it.
“This isn’t about funding innovation," said influential conservative
radio host Erick Erickson on Friday. “It’s a paradigm shift towards
socialism.”
In addition to Lutnick’s comments about targeting defense
contractors, Trump's top economic adviser has also said hinted about
what is likely coming next. He said the president is interested in
setting up a sovereign wealth fund in which federal government would
invest in an array of companies.
“There’ll be more transactions, if not in this industry then other
industries,” said Kevin Hassett, the director of the National
Economic Council.
One prominent politician did voice support for the Intel deal, but
it more likely hurts than helps Trump's cause with Republicans.
“Taxpayers should not be providing billions of dollars in corporate
welfare to large, profitable corporations like Intel without getting
anything in return," said Vermont Senator Bernie Sanders, a
self-described democratic socialist and Trump antagonist. “The
taxpayers of America have a right to a reasonable return on that
investment.”
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AP reporter Michelle L. Price contributed from Washington.
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