WASHINGTON (TNND) — The United States could soon seek to acquire more stakes in additional companies after President Donald Trump agreed to purchase 10% of Intel in a deal that blurs the lines between government and private business.
Trump announced last week the U.S. was acquiring a chunk of Intel in exchange for remaining grants originally designated for the struggling computer chip manufacturer through the bipartisan chips bill passed during the Biden administration. It is the latest step the Trump administration has taken for a more hands-on approach to how businesses operate in the U.S.
On Monday, Trump said the Intel investment was a new way of industrial policy, which had traditionally been conducted through tax breaks, subsidies and other public-private partnerships that have not typically included direct government stakes in companies.
“Yeah. Sure it is,” Trump said. “I want to try to get as much as I can.”
White House economic adviser Kevin Hassett told CNBC there will be other “transactions” like the Intel deal in other industries.
“This is a very, very special circumstance because of the massive amount of Chips Act spending that was coming in,” Hassett said on “Squawk Box.” “But the president has made it clear all the way back to the campaign, he thinks that in the end, it would be great if the U.S. could start to build up a sovereign wealth fund.”
Trump has been floating an American sovereign wealth fund for months, including an order directing the commerce and treasury secretaries to create plans to start one. A 90-day deadline in the order has passed without any public release of a plan.
Trump has increasingly tried to extract concessions from companies in exchange for government assistance and asserted influence over their direction in a series of deals he says are making the United States richer. His administration has also sought to at least partially nationalize companies that it sees as critical to national security and economic stability in a push to create more domestic semiconductor manufacturing and rare earth mining capacities in the U.S.
The U.S. government has become a significant shareholder of private companies in the past, but those purchases have typically come in times of crisis. One of the most notable examples was during the 2008 financial crisis when the government got a 60% stake in General Motors after a $50 billion infusion of cash.
Trump’s deal to acquire 10% in Intel, along with suggesting there could be others like it, raises questions about how it will help the company moving forward. The administration has defended it as an important investment in a critical industry and argued the equity stake could help spur business for the company.
But it also comes with risk for both the government and Intel. The company said in a Securities and Exchange Commission filing on Monday that it could face new risks, regulations and potential backlash as a result.
A key concern for the company is international sales, which made up 76% of its revenue in the last fiscal year.
“There could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors,” the company wrote in the filing. “There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company.”
Intel, once a darling of the tech industry, has struggled to keep up with its competitors by moving slowly to react to the rise of smartphones and more recently artificial intelligence, which have sent other companies market values soaring. It recorded its first annual loss in nearly four decades last year.
“If anything, it incentivizes them to engage even more in Washington and less in the marketplace,” said Ryan Young, senior economist at the American Enterprise Institute. “In the long run, that does not bode well for Intel. It makes them resemble the Postal Service more than Nvidia.”
Chipmakers have also agreed to give the government 15% of their revenue from selling computer chips to China in exchange for licenses to export them. Trump also secured a “golden share” in Nippon Steel in exchange for the government allowing its purchase of U.S. Steel to move forward.
The Defense Department also announced last month it bought $400 million in a company that mines rare earth materials, another priority for the Trump administration’s push for more American production.
Boosting American manufacturing capacity has also been a central piece of the rationale behind Trump’s expansive tariff regime and sprawling trade wars. Buying stakes in more companies specializing in industries with national security or supply chain implications could be a more common trend under Trump’s administration, but the strategy comes with plenty of questions over its effectiveness.
“Let’s assume that they’re acting in good faith, and their policy goal is to have more things made in America. Fair enough, you can have a debate about that, but what is the best way to achieve that goal? It’s not by nationalizing companies if they want to make more things in America,” Young said. “There’s a whole menu of things they can do that would be more effective than nationalizing failing companies.”