The U.S. Government Owns Pieces of More Companies Than It Used To. Here’s Why It Matters
As the federal government takes stakes in private companies, supporters say it protects jobs and manufacturing. Critics worry it could reshape competition and influence which businesses thrive.
The federal government is rounding out its portfolio as the Trump administration makes a habit of taking out equity stakes in private companies—a pattern that’s gaining traction, but not universal approval.
The federal government has taken some type of ownership in 31 companies, analysis from the Cato Institute shows, in a pattern that is gaining traction, though not approval from about half of the country. A late July poll from CNBC shows that nearly half of voters (49 percent) do not believe the government should be taking out positions within companies, compared to the 19 percent surveyed who were fine with the policy choice.
One mechanism that the government uses to take
One mechanism that the government uses to take out these equity stakes is through federal funding. Look back to August 2025, when the administration inked a deal with Intel to convert the nearly $9 billion in funding Intel nabbed from the CHIPS and Science Act, a Biden-era law aimed at boosting domestic manufacturing, into a 10 percent equity stake. The Commerce Department has used this law as a funding vehicle for about a dozen other deals.
Which begs the question: If the federal government’s dealmaking is to maintain the momentum it garnered in the last year, what are the implications for the private sector?
The daily digest for entrepreneurs and business leaders
An Inc.com Featured Presentation
If you ask Dave McClure, an original member of the “PayPal Mafia” who is now the founder of Practical Venture Capital, he thinks a clear line should be drawn. If the government wants to fund research or provide grants to certain capital-intensive industries, he says that’s fine. But plucking out specific companies to support can hit slippery slope territory real fast.
I feel like we’re getting into territory
“I feel like we’re getting into territory that makes me a little bit nervous about how the U.S. has historically operated,” McClure says, later adding: “I might wonder if the Trump administration has other reasons than the benefit of the American citizenry at its heart.”
Much has been said about conflicts of interest within the Trump administration, ranging from the Trump family’s sprawling crypto business to the vast number of organizations numerous members of the cabinet remain associated with. Even in the context of Intel, the Trump administration has pushed other technology companies to work with, or invest in, Intel, including Nvidia.
Source: www.inc.com
