Staff Reports
The Trump administration has quietly moved from one-off industrial help to a full-scale experiment in owning pieces of private companies. What began with headlines about a big Intel deal is now a pattern: the Commerce Department’s new letters of intent for up to $874 million in CHIPS R&D support explicitly include minority equity stakes, and independent trackers now count dozens of announced government investments worth roughly $27–28 billion. That shift should make conservatives uneasy — and make Democrats and progressives very interested.
The concrete step: CHIPS LOIs that include equity
This summer the Commerce Department signed letters of intent to support seven semiconductor R&D projects and said those awards could include minority equity stakes. The named firms include GlobalFoundries, Kepler, Multibeam, Extropic, Thintronics, OBSIDIA and Aeluma. Commerce Secretary Howard Lutnick has bluntly said, “We should get an equity stake for our money,” which captures the administration’s logic: taxpayers put up cash, so taxpayers should share upside. That sentence sounds tidy in an interview, but it opens a Pandora’s box when the federal government starts acting like a venture investor across many industries.
From a headline deal to a portfolio — why scale matters
One high-profile transaction can seem like a one-off. The Intel conversion into roughly a 9.9% government stake was that headline. But Jonathan Hillman’s tracking at the Council on Foreign Relations shows this is now dozens of deals totaling tens of billions of dollars. When you move from a single experiment to a portfolio, you change incentives. Federal agencies that once made grants or contracts now have skin in the game. That raises questions about who runs policy: elected officials or markets.
Progressives are already salivating — and planning
Predictably, progressive think tanks aren’t clutching pearls. The Roosevelt Institute and others are laying out how future Democratic administrations could use public equity to push climate, labor and industrial goals. Lenore Palladino and colleagues sketch governance tools — voting rights, sale rules, board seats — to turn government shares into policy levers. In plain English: once the precedent exists, the next party in power can use it to steer private companies toward political aims instead of pure business sense.
Legal fights and oversight alarms you should watch
There are already legal and accounting flashpoints. A Delaware Chancery challenge targeting the Intel deal is active and calls the transaction coercive. Critics note there is no single public ledger for these positions, and standard budget rules were not written for the federal government to hold a scattered private-equity portfolio. Conflicts of interest leap out: regulators and contract-makers can profit or lose on the same companies they supervise. Congress, the courts, and watchdogs will have to sort this out — and fast.
Conservatives used to argue that state investment in industry invites cronyism and politicized management. That warning has been partly validated by the current approach, because precedent matters more than party. We should demand clear limits: statutory authority spelled out, centralized reporting, conflict rules, and a hard line that these investments are for national security emergencies — not routine industrial policy. Otherwise the next political cycle will turn this experiment into a tool for reshaping private business by partisan priorities, and taxpayers will be left on the hook for the consequences.
