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The U.S. government is now Intel’s largest shareholder following President Donald Trump’s decision to exercise a 10% stake in the American chip giant.

The move, which is a stark reversal of long-held Republican economic principles, has drawn harsh criticism from conservatives who typically support the former president.

On the other hand, Trump is touting the move as a shrewd investment for the United States to become “richer and richer” and has even suggested it was the first of many, signaling the revival of what was previously known as industrial policy, a form of economic planning that directly involves the government in choosing and subsidizing key industries.

The question on many people’s minds: Does it constitute socialism? Socialism is often described as a system in which the government controls the “means of production” for the common good. By this definition, many of Trump’s critics argue, this is not so different than what happens in countries like China or Russia.

Not to mention the political irony of it all. When Barack Obama tried to seize control of Chrysler and GM during the last financial crisis, in 2008–2009, many conservatives were willing to look the other way because it was presented as a last-minute effort to save the century-old companies from total collapse.

But had Obama taken a 10% stake in Intel, conservatives close to Trump maintain that the right-wing media would have been clamoring that he was ushering in communism.

Trump maintains that this is different, saying that taking an Intel stake is an investment, not a bailout. He also noted that he had converted nearly $9 billion in grants (funds that were already guaranteed to the company by President Joe Biden’s bipartisan Chips Act) into equity to the benefit of the U.S. government. By doing so, Trump claimed, he had created $10 billion to $11 billion in immediate value for taxpayers. “Why are ‘stupid’ people unhappy with that?” the former president rhetorically asked.

Conservatives React

Larry Kudlow, a former top economic adviser to Trump, spoke out on Fox Business: “I don’t want the government owning stock in private industry. I am very, very uncomfortable with that idea.”

Steve Moore, an informal Trump adviser, was more blunt, issuing this tirade: “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.”

A conservative outlet, the National Review, published an editorial in which it cautioned that “government shouldn’t get into the chip business.”

North Carolina Republican Senator Thom Tillis warned that the deal could become a “semi-state-owned enterprise a la CCCP,” alluding to the Soviet Union. Senator Rand Paul went further in a tweet: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

There are other voices, though. Progressive Vermont Senator Bernie Sanders praised the move, calling it a great example of the government using its power to shape the industry for the benefit of the people. Howard Lutnick, the commerce secretary, flew to Trump’s defense 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 has its own concerns. The company was forced to acknowledge that Trump’s arrangement would probably “hurt our ability to receive future funding” from the U.S. government, could hurt Intel’s sales overseas, and could make parts of Intel’s business subject to heavier regulation. The chipmaker had already warned of 15% workforce cuts in March of this year, and with Intel now worth just $110 billion (its stock price has declined by half since the beginning of 2024), it is under pressure to perform. The company’s shares did bounce 4% after Trump’s announcement.

The Wall Street Journal reported that the former president had first insisted that Intel CEO Lip-Bu Tan, who had made past donations to the Chinese Communist Party and moved his family to China, step down, and that Trump only backed off after the two met at the White House. “I liked him a lot, I thought he was very good,” Trump said in a statement.

Intel has assured the market that, as a non-voting shareholder, the U.S. government will not have a say in the company’s business decisions. Critics, however, are not so sure: when the president of the United States becomes a company’s largest shareholder, he is almost certain to have an influence.

If Intel recovers, Trump will be able to say that he has saved one of the main pillars of U.S. technology. If it falters, then taxpayers will have to pay the price. With Trump making it clear that he will take more deals like these, the question of whether this is socialism, capitalism, or just plain Trumpism will get louder.

At the very least, the Intel deal shows that the federal government and private business relationship has been fundamentally altered — and in a way that underlines how Trump has reshaped the Republican Party’s attitude towards economic policy.