Trump Plans "Many More" Government Stakes After Intel Deal

The US government just bought 10% of Intel, and Donald Trump is already promising more.

"I will make deals like that for our Country all day long," Trump posted on Truth Social today, after his administration announced an $8.9 billion stake in the struggling chipmaker. His economic advisor Kevin Hassett confirmed this is just the beginning of a plan to create a US sovereign wealth fund.

This is a big fucking deal, and most people don't realize how radical it is. The US government doesn't buy chunks of private companies. That's what China does. That's what Saudi Arabia does with their oil money. Not America.

But Trump's doing it anyway, disguised as national security policy.

The Intel deal works like this: The government converts $5.7 billion in unpaid CHIPS Act grants into equity stakes, then adds another $3.2 billion from the Department of Defense's Secure Enclave program. Boom - 433.3 million Intel shares at $20.47 each, giving the feds a 10% slice of one of America's most important tech companies.

Trump claims the government "paid nothing" for these shares because they came from grants Intel was already promised. That's technically true and completely misleading. The government gave up $8.9 billion in direct funding to get ownership instead. It's not free - it's just a different payment method.

Intel's stock jumped 3% on the news, which makes sense. Government ownership comes with implicit backing. If Intel struggles, will the feds let their investment fail? Probably not. That creates moral hazard where companies take bigger risks knowing taxpayers will bail them out.

The scarier part is what comes next. Hassett told CNBC this Intel stake is "part of an ongoing plan" to build a sovereign wealth fund. These massive investment vehicles work great for countries like Norway (funded by oil revenue) or Singapore (funded by trade surpluses). The US doesn't have either.

What we do have is the ability to print money and take on debt. So essentially, Trump wants to create a sovereign wealth fund funded by borrowing against future taxpayers. That's... not how this is supposed to work.

Look, the national security angle isn't bullshit - we really do need domestic chip production. Anyone who's tried to buy a GPU in the last few years knows how fucked our supply chain is. Intel matters because TSMC and Samsung aren't exactly BFFs with American interests.

But there are other ways to fix this without the government becoming a shareholder. Direct grants work fine. Tax breaks work. Hell, just promise to buy X billion dollars of Intel chips over the next decade - instant market security without the government getting voting rights.

The real nightmare scenario is when this becomes political. Which Silicon Valley startup gets government investment? Which one gets told to go fuck itself? Suddenly every VC pitch includes a slide about "alignment with national priorities" and we're one step closer to state-controlled tech.

Trump's already hinting at the scope of his ambitions. "I love seeing their stock price go up, making the USA RICHER, AND RICHER," he posted. This isn't about national security - it's about turning the federal government into America's biggest hedge fund.

For Intel specifically, this creates a clusterfuck of conflicts. Imagine trying to negotiate with the EPA about your fab emissions when the EPA's boss owns 10% of your company. Or trying to fight an antitrust case when the Justice Department has a financial stake in your success. It's like having your landlord also be your judge, jury, and loan officer.

Other companies are probably salivating at the possibility of government investment. Why compete for grants when you can sell equity instead? Why worry about market discipline when Uncle Sam might bail you out?

The Intel deal might work out fine. Intel is fundamentally important to US technology leadership, and government backing could help it compete with TSMC and Samsung. But creating a precedent for regular government equity stakes in private companies is a massive shift toward state capitalism.

And Trump wants to do it "all day long."

Sovereign wealth funds sound fancy, but they're basically government piggy banks with better marketing. And since Trump wants to build one with taxpayer money, let's figure out how badly this could go wrong.

Norway's got the template that actually works: take oil money, invest it globally, let professionals manage it without politicians meddling. They've built a $1.8 trillion fund that owns like 1.5% of every stock on the planet. The key? They fund it with actual revenue (oil), not borrowed money, and politicians can't touch the investment decisions.

China's approach is the nightmare version. They use their sovereign wealth funds for geopolitical investments to buy strategic assets worldwide, but it's really just geopolitical chess disguised as investing. Countries are starting to ban Chinese sovereign wealth fund investments because they're obviously about national power, not returns.

Trump's plan sounds more like China than Norway. Instead of funding the program with actual revenue streams, he wants to buy equity stakes in American companies with borrowed money. That's not building national wealth - that's just the government playing venture capitalist with your tax dollars.

The problems are obvious if you think about it for five seconds. First: what pays for this? Norway has oil gushing out of the ground. Singapore has massive trade surpluses. America has a $37 trillion debt and runs deficits every year. Funding a "wealth fund" with borrowed money is like taking out a loan to buy lottery tickets.

Second: who's running this circus? Norway lets professional fund managers make investment decisions without politicians interfering. Trump's already talking about making deals personally, which means every investment decision becomes a political favor. That's how you end up losing billions on the president's golf buddy's startup.

Third, what's the investment strategy? Successful sovereign wealth funds diversify globally to spread risk. Trump seems focused on domestic companies for strategic reasons. That might serve national security goals but probably won't generate the returns needed to justify the program.

The Intel precedent is particularly worrying because it conflates two different objectives: industrial policy and wealth creation. Industrial policy uses government resources to support strategically important industries. Wealth funds use government resources to generate returns for citizens. Mixing them creates confused incentives.

If the government wants to support domestic semiconductor production, grant funding and tax incentives are cleaner tools than equity ownership. If it wants to build national wealth through investments, buying foreign stocks and bonds reduces risk better than buying domestic companies.

Trump's not stupid though - there's political genius in this approach, even if the economics are garbage. When Intel's stock goes up, he can tweet "WE MADE BILLIONS FOR AMERICA!" When grants just disappear into corporate R&D budgets, nobody notices. It's much easier to brag about investment gains than explain why subsidizing chip fabs matters for national security.

The real test comes during the next economic downturn. When Intel's stock price falls, will Trump demand management changes? When other portfolio companies struggle, will the fund provide bailouts? Sovereign wealth funds are supposed to be long-term investors, but political pressure creates short-term thinking.

There's also the competitive response to consider. If the US government starts taking equity stakes in domestic companies, other countries will respond with their own programs. That could escalate into a subsidy war where governments compete to back their national champions with public money.

Best case: Trump creates a small fund run by actual professionals who make boring, diversified investments and earn modest returns. Worst case: it becomes Trump's personal piggy bank for rewarding friends and punishing enemies while losing taxpayer money faster than a crypto bro in 2022.

Looking at Trump's history of casino bankruptcies and Truth Social stock manipulation, I'm not betting on the best-case scenario.