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The U.S. government is now Intel’s largest shareholder after President Donald Trump signed an executive order approving a 10% stake in the cash-strapped American chipmaker. The move is a repudiation of long-held Republican economic principles and has been roundly criticized by conservatives who otherwise support Trump.

Trump has billed the move as a “wonderful” investment that will make the U.S. “richer and richer,” and which could be replicated in the future. “I hope I’m going to have many more cases like it,” he said. Trump is engaging in what some call industrial policy — or, as Trump put it in a speech after the signing, “deciding who gets chips and who doesn’t get chips.”

The question now is whether this is socialism. One long-standing definition of socialism says it is a system that features “social ownership of the means of production.” By that definition, Trump’s move last week was similar to what takes place in China and Russia.

It is not without some political irony: When President Barack Obama decided to nationalize Chrysler and General Motors at the height of the 2008–2009 financial crisis, conservatives mostly accepted it as a temporary and necessary measure to rescue important American brands from bankruptcy. But had Obama decided to take a 10% stake in Intel, Trump allies say conservatives and conservative media would have declared it communism.

Trump claims this is different. His executive order called it an investment by the U.S. government, not a bailout. Trump also noted he turned $9 billion in grants into equity for the U.S. government. Grants are money that is set to go to the company, under Biden, through the bipartisan Chips Act. Trump claimed this converted the grants into $10 billion to $11 billion in value for taxpayers overnight. “Why are ‘stupid’ people unhappy with that?” Trump asked.

It is not only political critics who are angry, though. Kudlow, Trump’s former top economic adviser, called the move “very, very uncomfortable with that idea” in a Fox Business interview. Steve Moore, another informal Trump economic adviser, called it “terrible” in an interview with The Bulwark, adding, “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.”

The National Review published an editorial that said “government shouldn’t get into the chip business.” South Carolina Senator Thom Tillis said the deal created the risk of a “semi-state-owned enterprise a la CCCP.” U.S.S.R., in Russian.” Senator Rand Paul called it “socialism” on X. “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea,” he wrote.

But not everyone is unhappy. Sanders praised the decision and viewed it as part of a growing role of the government in setting and supporting the direction of an industry. “I for one think that the government can, and should, make smart investments like this,” Sanders wrote in a statement.

Howard Lutnick, the commerce secretary, also leapt to Trump’s defense. In an interview with Laura Ingraham, Lutnick said, “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, for its part, is warning of problems. In a filing to the Securities and Exchange Commission, the company said the deal could make it harder to get government grants in the future, hurt sales overseas, and make Intel subject to increased regulation. Intel also announced in January that it was laying off 15% of its workforce. The company’s valuation is at about $110 billion — down 50% in 2024 — and its shares rose 4% following Trump’s announcement.

The Wall Street Journal reported that Trump demanded the resignation of Intel CEO Lip-Bu Tan over his prior work for China. Trump reportedly called Intel’s general counsel to Tan’s house to ask the company leader to step down. Tan appeared at the White House for a meeting with Trump days later, and Trump changed his mind, telling reporters, “I liked him a lot, I thought he was very good.”

The president signed an executive order stating that the U.S. government will be a non-voting shareholder, though critics are quick to point out that when the president of the United States is the largest shareholder of a company, influence will almost certainly be exerted.

If Intel right-sizes and recovers, Trump will claim credit for bolstering a pillar of the U.S. economy. If it continues to spiral, American taxpayers will pay the price. Trump has also said openly that he will be seeking out future opportunities for deals like this.

At the very least, with the Intel stake, Trump has fundamentally altered the relationship between the federal government and private industry and has moved beyond the Republican Party’s old economic principles.