President Donald Trump is promoting a new economic strategy, aiming to secure direct equity stakes in prominent U.S. companies to fortify national security and industrial supremacy. This approach has taken shape with the federal government’s acquisition of nearly 10% ownership in Intel, following the conversion of federal grants into stakes. SkyWater Technologies, an Intel rival and a Minnesota-based semiconductor foundry with deep ties to the defense sector, has embraced the precedent but highlighted its full American operations. The firm, whose U.S.-based operations and lack of foreign entanglements set it apart, believes equity stakes can ensure accountability in taxpayer-supported companies with global structures. Looking ahead, SkyWater seeks to deepen collaboration with the Trump administration to expand domestic capabilities in foundational chip technologies, essential for systems in airplanes, automotive, defense, biomedical equipment, and quantum computing. Other potential candidates for equity-linked deals include GlobalFoundries and Micron, both of which have received federal support for their large-scale chip manufacturing facilities. However, critics, including Jai Kedia from the Cato Institute, argue the policy displays favoritism towards large firms and potentially veers towards socialism.
Trump’s strategy represents a significant shift in U.S. economic policy, as the federal government moves from loan guarantees and tax incentives to direct ownership in private companies. This new approach raises questions about the balance between national interests and market capitalism, as well as the potential implications for competition and innovation. The Intel deal, which resulted in the federal government holding nearly 10% of the company’s shares, is a clear example of how this policy could reshape the landscape for U.S. technology firms. With the administration signaling its intent to pursue similar deals in other sectors, companies across various industries may need to prepare for potential government involvement in their operations. However, the long-term effects of this strategy remain uncertain, as the administration continues to explore its broader implications.