Trump’s State Capitalism Experiment: Washington Takes a Stake in Intel

The United States has entered uncharted waters. Last week, the federal government acquired a 10% stake in Intel, effectively marking a partial nationalization of one of America’s most iconic technology companies. Both the White House and Intel rushed to frame the deal as a win — but the narratives could not be more divergent.

Source: NBCNews.

President Trump declared: “The United States paid nothing for these shares, and they are now worth roughly $11 billion.”

Intel countered with its own message: “The government is investing $8.9 billion in Intel’s common stock, demonstrating the administration’s confidence in our company.”

Both statements gloss over the underlying reality. Intel had already received $3.2 billion through the Secure Enclave Program and is still awaiting an additional $5.7 billion grant under the CHIPS and Science Act — legislation introduced under the Biden administration. In effect, this transaction is not a fresh “investment” but a requisition of equity in return for past subsidies. That makes the event unprecedented in U.S. economic history.

The Next Frontier: Defense Contractors

Commerce Secretary Howard Lutnick has openly suggested that the Pentagon may pursue similar stakes in major defense contractors, including Lockheed Martin, General Dynamics, and Palantir. The rationale is straightforward: tighter control over budgetary flows in industries where government is both the financier and the client.

From Subsidies to State Capitalism

While critics see a creeping form of state capitalism, supporters argue this is fiscal accountability by other means. Instead of money disappearing into opaque subsidy pipelines, the government now holds equity — capturing upside while monitoring corporate strategy.

The stakes, however, extend beyond balance sheets. If Washington follows through, the relationship between U.S. corporations and the federal government will tilt closer to the model long associated with China or Russia: the state as both regulator and shareholder.

For now, the Intel deal stands as a watershed moment — one that redefines the boundaries of public-private partnership in America. Whether this becomes a new economic doctrine or remains a one-off response to political pressure will depend on what happens when the Pentagon turns its attention to the defense-industrial complex.