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The federal government is now the largest shareholder in Intel after President Donald Trump ordered a 10% stake in the beleaguered U.S. chipmaker. The move is a dramatic break from the core Republican economic philosophy. It’s also drawn fire from conservatives who are usually supporters of the president.

In an interview, Trump has defended the deal as a “savvy investment” that will make the U.S. “richer and richer.” He also said that Intel is the first in a series of similar transactions. “I hope I’m going to have many more cases like it,” Trump said in an interview. In that sense, he is taking a page out of the old-school economists’ playbook on industrial policy — the direct involvement of government in supporting and influencing the direction of key industries.

The question many are now asking is whether this goes into the realm of socialism. For generations of Americans, socialism has often been synonymous with government ownership of the means of production, to the benefit of all of society. By that definition, Trump’s move isn’t so different from what the government is doing in China, Russia, or many other nations.

It’s a delicious political irony for people on the right. When Barack Obama sought to take control of Chrysler and General Motors during the 2008–2009 financial crisis, conservatives praised it as a one-time effort to rescue iconic American companies from imminent collapse. If Obama had taken a 10% stake in Intel, Trump allies say, right-wing media would have been calling him a communist.

Trump has insisted this is different because it’s an investment, not a bailout. He also noted that he converted $9 billion in grants — money that had already been committed to the company by the Biden administration as part of a bipartisan Chips Act — into equity for the U.S. government. By doing that, he said, the deal created $10 billion to $11 billion in immediate value for taxpayers. “Why are ‘stupid’ people unhappy with that?” Trump asked.

Conservatives have pushed back on that. Larry Kudlow, Trump’s former top economic adviser, said on Fox Business that he was “very, very uncomfortable with that idea.” Steve Moore, another Trump informal adviser, was even 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,” Moore said.

National Review published an editorial that said: “government shouldn’t get into the chip business.” Thom Tillis, a Republican senator, was particularly alarmed by the potential to have a “semi-state-owned enterprise a la CCCP,” using the former Soviet Union’s acronym in Russian. Senator Rand Paul made a similar point on X: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

Not all Republicans are condemning the move, however. Bernie Sanders, a Democratic progressive senator, lauded the move as an example of government shaping industry for the public good. Howard Lutnick, the Commerce Secretary, leaped to Trump’s defense on Laura Ingraham’s show: “That is not socialism. That’s the best businessman in the United States of America in the Oval Office doing fair things for us.”

Intel itself isn’t so pleased, according to an SEC filing by the company. In that required document, Intel warned that the deal could hamper its ability to win future government grants and cost it in sales outside of the U.S. The arrangement also could lead to additional regulation of its operations. Intel announced earlier this year that it was cutting 15% of its workforce. The company is worth $110 billion on the market, down 50% from the start of 2024, but its shares did jump 4% after Trump’s announcement.

The Wall Street Journal reported that Trump demanded the resignation of Intel’s CEO, Lip-Bu Tan, for having worked in China in the past, but that he changed his mind after Tan met with him at the White House. “I liked him a lot, I thought he was very good,” Trump said.

The promise by Trump that the U.S. government will be a non-voting shareholder and stay out of the company’s decision-making doesn’t seem to be allaying concerns. Critics point to the reality that if the president of the United States is a company’s largest shareholder, he’s almost certain to have influence.

If Intel rights the ship and starts to thrive, Trump will take credit for bolstering a pillar of American technology. If it goes under, taxpayers will foot the bill. And if Trump openly promises to do more deals like this, the question of whether this is socialism, capitalism, or just Trumpism is one likely to be debated further.

At the least, Trump has created a new reality between the federal government and private business that fundamentally changes the relationship.