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Donald Trump wants more deals like Intel's, worrying Corporate America
“I want to get as much as I can. I hope to have many more like Intel,” US President Donald Trump says at a White House media briefing.
US President Donald Trump wants to make more investments in healthy US companies. Whether Corporate America is on board is another story.
“I want to get as much as I can,” Trump said during a media briefing at the White House on Monday. “(I) hope to have many more like Intel.”
On Friday, the White House announced a near-10% stake in Intel Corp. by converting government grants into equity.
“Intel has been left behind” compared to competitors in the chipmaking industry, Trump had said then, adding he had floated the idea when he met with Intel's Chief Executive Officer Lip-Bu Tan earlier this month.
“And I said, You know what? I think the United States should be given 10% of Intel, and he said, ‘I would consider that,’ and I said, ‘Well, I’d like you to do that,’” Trump said.
State-Owned Capitalism
The Trump administration's approach does away with decades of thinking about the US economy, where the government took corporate stakes in rare emergencies like the 2008 global financial crisis and the subsequent bailout of US auto companies. Intel is struggling, but it still has a cash cushion of $9 billion and a market value of $105 billion.
To critics, the Intel move—along with the White House's pressure to get the US Federal Reserve to lower interest rates, its use of emergency powers to slap tariffs on imported goods and involvement in different mergers—threatens the business world's nimbleness.
“We're moving from a pure capitalistic economy to a much more state-engaged economy… That's a huge change for America and over where we've been. I've never seen an era like this,” said Bill George, former Medtronic CEO and executive education fellow at Harvard Business School.
The risks of the government's involvement are no more apparent than in Intel's own regulatory filing on Monday
The company laid out several new risk factors to having the government invested in the company—from potentially harming international sales, to limiting the chipmaker's ability to secure future government grants, or subjecting the company to additional regulations or restrictions in other countries.
Intel CEO Lip-Bu Tan went a step further in a video posted on Monday by the Commerce Department, saying, “I don't need the grant. But I really look forward to having the US government be my shareholder.”
Analysts also raised questions about how the Intel deal will affect customers.
“Is it conceivable that as part of something like this the administration might 'encourage' customers to use Intel’s capacity?,” Bernstein analyst Stacy Rasgon wrote in a note.
“Companies that are nationalised in whole or in part don't do as well, because they are restricted from making the kinds of strategic decisions that would be solely market-based,” said Nell Minow, chair of Portland, Maine-based ValueEdge Advisors.
Intel is not the only company where Trump has become personally involved.
The White House intervened to complete the purchase of US Steel by Japan's Nippon Steel in June, taking what Trump called a “golden share” that gives Washington say over its operations. It took a stake in rare earths company MP Materials as well. On Monday, White House economic advisor Kevin Hassett said the government could take additional stakes in other companies.
Make In America
The White House argues that the US needs to develop more production capacity in critical industries rather than outsource that manufacturing to other countries.
Numerous CEOs met with Trump shortly after his re-election in November 2024, and that parade of visitors has continued into his term. It has yielded the likes of Apple CEO Tim Cook giving Trump a present of a customised souvenir plaque with a 24-karat gold base mined from Utah earlier in the month. Apple—one of the biggest companies in the world, with a market capitalisation north of $3 trillion—has been trying to shift production away from China, to India, a move Trump has also criticized.
Apple has announced roughly $600 billion in planned investment in the US, though the White House has suggested it could also build smartphones locally. The US does not have significant capacity to make the devices.
