Trump Investing US Funds in Intel Is Strategy, Not Socialism

When President Donald Trump announced that the US government would take a 10% stake in Intel Corp., critics called it unprecedented, even “socialist.” But history shows otherwise.

The federal government has often stepped in to own or support companies when it judged that the private market couldn’t, on its own, protect services or industries critical to the country. The Intel deal fits within that pattern.

Consider the US Postal Service. In many countries, postal systems have been privatized, including Britain’s Royal Mail, Germany’s Deutsche Post, and the Netherlands’ PostNL. The US, by contrast, deliberately kept the Postal Service public to ensure universal service, including to rural and unprofitable areas where private carriers might not operate.

The same reasoning shaped the creation of Amtrak in 1971, after private railroads abandoned passenger service. Rail travel was judged too important to disappear entirely, so the government stepped in.

Finance offers another example. The Federal Deposit Insurance Corporation—created during the Great Depression to restore trust after banking failures—operates as a government corporation, insuring deposits and sustaining trust in the banking system.

At times, government ownership has also been a crisis response. During the 2008 financial meltdown, Washington placed Fannie Mae and Freddie Mac under conservatorship and temporarily took stakes in General Motors, AIG, and Citigroup through the Troubled Asset Relief Program.

These actions were not ideological experiments but practical steps to stabilize the economy and protect jobs. Once recovery took hold, most stakes were sold.

Seen against this backdrop, investing in Intel is not a new phenomenon. Semiconductors aren’t just another industry; they’re a strategic necessity. Chips power defense systems, satellites, and cyber infrastructure. They’re essential for economic competitiveness, from artificial intelligence to clean energy to consumer electronics.

Yet the US share of global semiconductor manufacturing has eroded, while advanced production is concentrated in Taiwan, a flashpoint in US–China tensions. Relying solely on foreign supply chains leaves the US exposed to unacceptable risks.

The Intel deal reflects what can be called a coalition model: The government provides funding for national priorities, universities drive research, and industry turns that research into large-scale production.

Rather than scattering subsidies across many projects, this approach creates lasting partnerships in areas where US leadership is essential. Intel’s role in advanced semiconductor manufacturing makes it a prime example.

None of this is cost-free. Government involvement always carries risks: of favoritism in the allocation of funds, of reduced competition if one company is given too much of an advantage, or of political influence seeping into decisions that should remain driven by long-term economic logic.

Critics are right to warn that public–private partnerships can go astray if oversight is weak or incentives are misaligned. But the greater danger here is inaction. If the US hesitates, others, for example, China, will define the next generation of strategic technologies.

The Intel investment signals that Washington intends to compete with global rivals by strengthening and working in collaboration with the US private sector. In today’s world, advanced technology is a basic necessity, just as mail delivery is, which is why the US has kept the Postal Service public despite privatization elsewhere. The government’s involvement with Intel can generate broad benefits for the country and the US tech industry.

This deal should not be judged by Intel’s quarterly results, but by whether it expands US capacity in advanced semiconductor manufacturing, strengthens supply chain resilience, and generates spillover innovation beyond one company.

If this coalition model succeeds, it could guide future investments in other strategically vital industries such as clean energy technologies, quantum computing, and biotech—sectors where high capital costs and long timelines make purely private solutions insufficient.

For practitioners, the task is to design frameworks that make these partnerships both effective and accountable. That means establishing clear performance metrics so that public investments are tied to measurable outcomes—like expanded production capacity, job creation, and innovation spillovers—rather than vague promises. It also requires strong oversight mechanisms to prevent waste, favoritism, or capture by special interests.

Transparency in how funds are allocated, and sunset provisions that define how and when government support should be scaled back, help ensure that public involvement remains a catalyst rather than a crutch. Finally, practitioners must balance national security priorities with the need to preserve competition, so that strategic investments expand the field of innovators rather than entrenching a single corporate champion.

Governance should protect public resources, competition should be maintained, and exit strategies should allow the government to step back once its role is no longer essential.

One of the main concerns is that close ties to regulation or government contracts could unintentionally give certain companies an advantage that discourages healthy competition. Ideally, public investment can serve as a catalyst for growth and then transition to private leadership, helping innovation flourish while keeping markets fair and open.

With the right structures in place, government involvement can become a launchpad for innovation, ensuring US leadership in the technologies that will define the future.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Anat Alon-Beck is associate professor at Case Western Reserve University Law School.

Miriam Schwartz-Ziv is a finance professor at the Hebrew University of Jerusalem.

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