On August 22, 2025, the U.S. government became the largest single holder of common stock in Intel Corporation. The Trump Administration announced an $8.9 billion equity investment, while contractually agreeing to vote as management directs, surrendering governance rights, and converting what were conditional grants into permanent capital with no strings attached.
Two months later, it has become clear that this maneuver is part of a broader effort by the Trump Administration to take equity stakes in domestic firms, including a 15% stake in MP Materials (a rare-earth mining company) and a 5% stake in two lithium mining companies. How should we understand these deals? And what do they tell us about contemporary American state capitalism?
Some right-wing commentators have cast the Intel investment as the first step on the road to socialism. But as I argue in what follows, a closer look at the details of the deal shows that it functions as an elaborate mechanism for socializing risk while privatizing control and returns. Intel secures capital without conditions; taxpayers inherit risk without control. The government acknowledges that markets alone cannot deliver technological sovereignty, yet it refrains from building the public capacity that might.
Whether this model proves financially profitable is beside the point. Its broader precedent—state resources without public authority—offers the wrong path forward for American state capitalism: one that entrenches corporate power while foreclosing more democratic and effective alternatives.
Public Capital Without Accountability
According to Intel’s disclosures on Form 8-K, the transaction converts $5.7 billion in awarded but unpaid CHIPS Act grants and $3.2 billion in Secure Enclave funding into 433.3 million shares of common stock—representing a 9.9% stake—plus warrants for an additional 240.5 million shares. The structure of the Intel deal reveals a peculiar form of state investment that defies easy categorization and rewards Intel at nearly every turn (even while existing shareholders may have their stake diluted by the issuance of new shares).
This arrangement provides capital while contractually prohibiting meaningful oversight. The voting agreement (at Section 4.6) requires the government to support management’s board nominees and proposals, and to oppose all others. The result: taxpayers as largest shareholder, but contractually bound to silence, rubber stamping management’s decisions with a few inconsequential exceptions. This “silent partner” model represents a distinctly American approach to industrial policy—one that acknowledges the necessity of state intervention while neutering any capacity for public direction.
Beyond likely violating the law, in converting the CHIPS grants into an equity stake, the Trump administration has abandoned already existing oversight mechanisms. Previously, Intel was entitled to $5.7 billion in CHIPS Act grants, to have been disbursed over time and subject to performance milestones. The agreement converted these future payments into immediate equity at $20.74 per share—a discount to the then-market price. Rather than receiving grants that came with clawback provisions if Intel failed to meet its commitments, Intel now receives “permanency of capital,” as the press release in its 8-K filing states. According to that filing, the deal also eliminates the “existing claw-back and profit-sharing provisions associated with the government’s previously dispersed $2.2 billion grant to Intel under the CHIPS Act.”
While traditional industrial policy has itself been criticized for including sufficient oversight as it directs private investment toward public goods, the Intel deal entirely abandons—indeed inverts—this logic: public resources flow to private hands, but the tools for public direction are contractually prohibited. As law professor Brian Quinn told Wired, the choice of common stock over preferred stock meant the government was forgoing protective provisions that would “ensure[] that the government gets paid back.”
If Intel becomes the template, other firms will demand the same: public capital without accountability. The result is not sovereign wealth but corporate capture—an arrangement that entrenches incumbent power while eroding the state’s ability to direct economic development.
Legal and constitutional shadows
Understood in context of Executive Order 14196, “A Plan for Establishing a United States Sovereign Wealth Fund,” issued in February, the equity stake in Intel can also be best understood as the emergence a SWF built piecemeal through executive action. Unlike Norway’s or Singapore’s funds—legislatively authorized, transparently governed, and subject to oversight—this American version is ad hoc, opaque, and heavily tilted toward corporate interests. In this telling, Intel is part of an “ad hoc collection of U.S. stakes in business sectors, such as Bitcoin, TikTok, and golden share of Nippon Steel-U.S. Steel merger.” Law professors Curtis Milhaupt and Angela Huyue Zhang have aptly described this as “lawless state capitalism.”
As Congress was considering the CHIPS Act, Senators Bernie Sanders and Elizabeth Warren co-sponsored an amendment that would have required exactly the sort of equity investment contemplated here. That amendment was not adopted, however, and the Trump Administration’s investment rests on shaky legal grounds.
The CHIPS Act authorized grants, not equity swaps. The Department of Commerce has asserted that discretion over grant disbursement includes authority to condition grants on equity issuance—a leap from spending to investment power. Unlike the 2008 TARP program, no explicit congressional authorization supports the arrangement. Intel’s own 8-K acknowledges the nature of this risk: courts or future administrations could declare the transaction “unauthorized, void, or voidable.”
Concerns about this transaction should not make us shy away from the idea of the “public option” more broadly, as I have previously written in these pages, drawing on the suggestions of Saule Omarova for a more targeted National Investment Authority. Even under existing law, according to Peter Harrell, the federal government “has colorable legal authority to take stakes in private companies—far more frequently and on a far greater scale than it has in the past.”
Broader questions of political economy
To conclude our discussion, consider how Intel throws into relief questions about state and market in American political economy.
One question concerns the politics of visibility. That a massive public investment can be structured to appear nonpolitical—capital without control, ownership without governance—points to a broader ideological project. The state is present everywhere in the economy, but political discourse insists that it remain invisible, especially when its presence would imply obligations of accountability or redistribution. The insistence on invisibility is part of how legitimacy is maintained in a system that needs the state’s constant intervention but disavows that need at the level of ideology.
In part, such invisibility allows the government to outsource public functions to private entities while maintaining the pretense that market mechanisms ensure optimal outcomes. In this respect, the libertarians note that the Intel deal is a form of state capitalism with “American characteristics” (derogatory). But that overlooks that markets cannot optimize for public goods like national security, technological sovereignty, regional development, or labor standards. When the state invests $8.9 billion in pursuit of these goals while contractually forgoing any means to direct that investment toward public purposes, it illustrates the poverty of market fundamentalism as governing philosophy.
Another question concerns about the shifting boundary between public and private risk, and the circumstances under which risk is separated from control. As Joan MacLeod Heminway has elaborated, capital markets are routinely backstopped by bailouts, emergency lending, and other extraordinary interventions in moments of crisis. The Intel deal extends the model of crisis-time bailouts to peacetime industrial policy.
The deal also raises questions about democracy’s reach in the economy. If even $8.9 billion in public equity cannot secure a governance seat at the table, what does that say about the capacity of democratic politics to shape production? We have long debated whether courts or agencies should constrain markets. But the Intel episode reminds us that the problem is prior: whether elected governments are willing to claim authority to direct economic life at all. The refusal to govern is itself a mode of governance.
Finally, the Intel episode underscores the poverty of our institutional imagination. We know how to write checks to corporations. We know how to structure markets so that public risk underwrites private gain. But we have forgotten how to build institutions that exercise democratic control over investment, production, and innovation. That forgetting is not neutral; it is cultivated. To recover the capacity for genuine industrial democracy, we will need not only new policies but new narratives—ones that make the state’s role visible, contestable, and accountable. Otherwise, Intel will be remembered not as an inflection point, but as a symptom of our unwillingness to confront the state’s generative role in structuring and enabling modern capitalism.
