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Donald Trump’s decision to make the U.S. government Intel’s largest shareholder has set off alarms on both sides of the aisle and left conservatives across the country asking whether the president’s action crosses the line into socialism.

The federal government officially became Intel’s largest shareholder after Trump approved the purchase of a 10% stake in the American chipmaker that is on life support. The decision breaks from Republican orthodoxy and was condemned by some of Trump’s conservative supporters.

The former president has brushed off such complaints, instead framing his decision as a shrewd investment for America’s future. “We made a deal with Intel, and guess what? We’re going to be richer and richer because of it,” Trump said, as he promised that Intel is just the first of several such moves he will make. “We’re taking control of our country, like we’re supposed to. Nobody thought I was going to be tough enough on Intel, but we are Intel now, okay?” he added, using one of his campaign rally favorites.

By opting to take an ownership stake in a private company, Trump is reviving a practice that mainstream economists long ago branded “industrial policy.” But in practice, Trump’s move is a government intervention in private markets that comes with all of the risks — and some of the same economic effects — of industrial policy by another name. The big question is whether Trump’s action crosses the line into socialism.

Defining Socialism

Socialism is an often-contested term. It has had many different definitions and a wide range of diverse applications in the real world. But for most of the 20th century, socialism’s defining characteristic was the transfer of the means of production into public ownership, i.e., the government, for the benefit of society as a whole.

By that definition, Trump’s move to make the U.S. government Intel’s largest shareholder is not so different than what the Chinese or Russians do, his critics argue.

Politics and Political Irony

It was conservatives themselves who pushed Barack Obama to take control of Chrysler and General Motors during the financial crisis of 2008–2009. “We’ll lose an icon,” they screamed, and when Obama nationalized Chrysler and GM in March of 2009, the right largely accepted it as a temporary necessity to prevent the failure of iconic American brands. Obama nationalized Chrysler and GM as a last resort to prevent an economic collapse from which the companies would not have recovered. It was a drastic measure in an unprecedented situation.

The question is whether a 10% stake in Intel, a thriving American company in a key sector of the economy, is any different. Trump allies and right-wing media would have framed it differently in 2009. “There is a difference between being forced to take control of an American company to avert financial disaster and being able to choose which American company you want to nationalize,” said Bruce Keller, a conservative radio host and Trump supporter. “This isn’t a socialist plot by the Democrats; it’s a Wall Street cash grab by corporate welfare-loving Republicans,” he added.

Trump Responds: Not a Bailout

Trump says this is different, and he’s right. The Intel stake was an investment, not a bailout. The former president told Fox Business’s Laura Ingraham that he converted nearly $9 billion in grants previously awarded to the company by the Biden administration and other government entities into a direct equity stake for the U.S. government.

By that accounting, Trump said the deal instantly created $10 billion to $11 billion in value for U.S. taxpayers. “So, where does this $10 billion come from out of nowhere? Why are ‘stupid’ people unhappy with that?” Trump asked in the interview. “Isn’t it great that we own Intel?”

Resistance from Conservatives

On Fox Business, Trump’s former top economic adviser, Larry Kudlow, said that he was “very, very uncomfortable with that idea.” Steve Moore, another of Trump’s informal economic advisers, was blunter. “I hate corporate welfare,” he said. “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.”

Commerce Secretary Howard Lutnick hurried to Trump’s defense in an interview with Laura Ingraham, telling the Fox host: “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’s Warnings

Intel itself is now on record as saying Trump’s move will make it harder for the company to get future government grants, impact its global sales, and subject its operations to more government regulation. The company, which had already been struggling before Trump made his announcement, announced in May that it would lay off 15% of its workforce. Intel’s market value stands at about $110 billion, but its share price jumped 4% on Trump’s announcement, despite its having fallen 50% in 2024.

According to The Wall Street Journal, Trump initially demanded Intel CEO Lip-Bu Tan’s resignation over previous business ties to China, then backed off after a White House meeting with the CEO. “I liked him a lot, I thought he was very good,” Trump said after the meeting.

Trump left the door open for direct government involvement in Intel’s business decisions even after he promised that the U.S. government would be a “non-voting” shareholder in Intel that would not “interfere” with the company’s decisions. It will be interesting to see how the president exercises his shareholder status behind the scenes.