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The U.S. government became Intel’s largest shareholder last week after President Donald Trump took a 10% stake in the struggling American chipmaker. The move represents a sharp break with the Republican Party’s economic orthodoxy and has provoked outrage from conservatives who normally support the president.

Trump has insisted that it was a “great deal” and insisted it will make the country “richer and richer.” He has also suggested that Intel is just the first in a series of similar actions. “I hope I’m going to have many more cases like it,” he said. Trump has essentially revived what used to be known as industrial policy — the notion that the government should play a hand in shaping and backing up key industries.

The big question is whether it crosses the line into socialism. For at least the last half-century, conservatives have defined socialism as government control of the means of production for the common good. By that standard, the argument goes, Trump’s action is no different than what’s happening in Russia, China, and other so-called authoritarian states.

Republicans (including Trump) were all over Barack Obama when he took control of Chrysler and GM during the financial crisis in 2008–9. It was an emergency bailout move to save iconic American companies, conservatives argued. What conservatives are saying now is that had Obama taken a 10% stake in Intel instead, conservative media would have been calling it communism.

The point is that Trump is painting a different picture this time. “This is not a bailout,” he said, instead calling the move an investment. Trump also noted that he took grants (money already committed to the company from President Joe Biden’s bipartisan Chips Act) and turned them into equity for the U.S. government. Trump says he generated $10 billion to $11 billion in “immediate value” for taxpayers by doing that. “Why are ‘stupid’ people unhappy with that?” he tweeted.

The conservative backlash

Conservatives aren’t buying it. Larry Kudlow, Trump’s former top economic adviser, called the deal on Fox Business. “Frankly, I’m very, very uncomfortable with that idea,” Kudlow said. Steve Moore, an informal economic adviser to Trump, was blunter: “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 National Review ran an editorial saying, “government shouldn’t get into the chip business.” Senator Thom Tillis raised the alarm that the deal risks creating “a semi-state-owned enterprise a la CCCP,” which was the Soviet Union. Senator Rand Paul used the same formulation on X: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

The action had its defenders, too. Progressive Senator Bernie Sanders tweeted: “The president of the United States has taken over 10% of Intel. Let’s use the power of government to rebuild our country!” Commerce Secretary Howard Lutnick rushed to Trump’s defense in a call with Laura Ingraham. “That is not socialism. That’s the best businessman in the United States of America in the Oval Office doing fair things for us,” he said.

Intel itself didn’t exactly sing Trump’s praises, either. The company’s required SEC filing on the deal noted that it “could hurt our ability to obtain future grants from the United States government,” and could “adversely affect our global sales” and subject the company to “additional regulation.” Intel has struggled even before this deal, announcing in January that it would be laying off 15% of its workforce. The company is valued at about $110 billion — or 50% less than it was at the start of 2024. Its share price did jump 4% right after Trump’s announcement, however.

The Wall Street Journal reported that Trump initially demanded the resignation of Intel CEO Lip-Bu Tan over his past connections to China, then backed off and met with Tan at the White House. “I liked him a lot, I thought he was very good,” Trump said afterward.

Influential or not, Trump will get credit or blame for what happens next. Intel’s market valuation could go way up or way down under Trump’s leadership. If the company comes back and is profitable, he will claim it as a success. If it continues to struggle, it will cost American taxpayers.

The debate over whether this is socialism, capitalism, or simply Trumpism is likely to grow. But at a minimum, the Intel deal is a significant shift in how the federal government and private business interact, and a reminder of how Trump has transformed the Republican Party’s economic philosophy.