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President Donald Trump this week made the federal government Intel’s largest shareholder after he authorized the purchase of a 10% stake in the financially struggling American chipmaker. It’s a big pivot away from decades of Republican economic orthodoxy, and it’s earning Trump a torrent of conservative criticism from people who would normally be fighting on the same team as the president.

On the other hand, Trump himself is calling the deal a smart investment that will make the United States “richer and richer.” The president has suggested that Intel is just the start, and he’s “hopeful” to have many more such cases going forward. “I hope I’m going to have many more cases like it,” Trump said, when describing his move to a small crowd of reporters before boarding a plane to Utah. “I like that so much better than selling bonds, where the money is going out of the country, right?”

The move, for better or worse, harkens back to a previous era of American economic policymaking when the federal government had a more direct role in directing and shaping the nation’s largest companies and industries. Economists used to call that strategy industrial policy, but it’s been anathema to conservative policymakers for years. When Trump authorized the government to become Intel’s largest shareholder, he gave that word a whole new meaning.

Is Trump’s Intel move socialist?

One question on the minds of some conservatives is whether the move is now socialist. For years, socialism has been defined as, among other things, government ownership of the means of production for the good of society as a whole. By that standard, Trump’s move this week is indistinguishable from what China or Russia is doing.

In that sense, Trump has potentially broken the Republican Party. When former President Barack Obama was on the verge of taking control of Chrysler and General Motors during the 2008–2009 financial crisis, the move was described by conservatives as an emergency action to save a handful of American iconic companies from failing during the Great Recession.

If Obama had authorized the U.S. government to take a 10% stake in Intel, conservatives in the Trump White House say that Breitbart, Fox News, and other conservative media outlets would have called the action communism.

Trump, though, insists this is different. When he announced the stake to reporters, he stressed that it was an investment, not a bailout. He also pointed out that he had effectively converted nearly $9 billion in grants — money that had already been earmarked for the company under President Joe Biden’s bipartisan Chips Act — into government equity.

By doing so, Trump’s math showed, the deal created $10 billion to $11 billion of immediate value for taxpayers. “Why are ‘stupid’ people unhappy with that?” Trump asked.

Conservative pushback and political risks

Conservatives on the receiving end of the government bailout aren’t buying the argument. Trump’s former top economic adviser, Larry Kudlow, said on Fox Business on Wednesday that he was “very, very uncomfortable with that idea.”

Steve Moore, another informal adviser to Trump on economic issues, was even more blunt in his criticism. In a new interview with the New York Times, Moore said, “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.”

The editorial board of National Review published an editorial on Wednesday morning that said “government shouldn’t get into the chip business.” Senator Thom Tillis said in a statement that the deal created “major concerns, given the risk of a new semi-state-owned enterprise a la CCCP.” Tillis is referring to the acronym for the Union of Soviet Socialist Republics.

Senator Rand Paul went viral on social media with his own variation on the same point: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

Not all Democrats are cheering, though. Bernie Sanders, the progressive senator from Vermont, celebrated Trump’s decision on social media. Sanders is a former democratic socialist and one of the strongest advocates in Congress for the government using its resources to direct industry for the common good.

Howard Lutnick, the secretary of commerce under Trump, leaped to Trump’s defense on Laura Ingraham’s radio show, declaring: “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, meanwhile, says there are costs to the new arrangement. The company was required to file a notice of the arrangement with the Securities and Exchange Commission on Wednesday. In that filing, Intel warned that the stake could hurt its future ability to receive government grants and subsidies, harm sales outside the U.S., and make the company’s operations more susceptible to regulatory oversight and control.

Intel has struggled in recent years, announcing earlier this year that it would lay off 15% of its workforce. The company is valued at around $110 billion, down 50% from the beginning of 2024, although its share price did rise 4% after Trump’s announcement.

The Wall Street Journal reported this week that Trump initially asked Intel CEO Lip-Bu Tan to resign for past associations with China, but then had a change of heart after a face-to-face meeting at the White House. “I liked him a lot, I thought he was very good,” Trump said afterward.

Trump’s decision Wednesday to let the U.S. government become the largest shareholder at Intel includes an agreement that the government will be a non-voting shareholder and won’t interfere with the company’s business. But the move still changes the dynamic between government and the company and leaves open the question of how much the president of the United States might be able to pull Intel’s strings as its largest shareholder.