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On Tuesday, the federal government became Intel’s largest shareholder after President Donald Trump agreed to take a 10% stake in the beleaguered American chipmaker. The move is an unprecedented break from Republican economic orthodoxy, and it has been met with an avalanche of criticism from conservatives who have otherwise been staunchly loyal to the president.

Trump, by contrast, has heralded the deal as a shrewd investment and said it will make the United States “richer and richer.” Trump has suggested the deal with Intel is just the first step in a new approach to industry policy. “I hope I’m going to have many more cases like it,” he said.

The president’s announcement was greeted with a new round of questions from economists and policy experts: Is it socialism? For generations of politicians and conservatives, socialism has been defined by government ownership of the means of production for the purpose of managing a society’s economy. By that definition, Trump’s decision is little different than what happens in communist China or Russia.

“It is a stunning reversal of what Republicans have said about the limits of the proper role of government,” said Ajay Chaudhary, a law professor at George Washington University. “But at the same time, the political context is very different from, say, what President Obama did in the Chrysler situation.”

Conservatives were livid when Obama decided to take control of Chrysler and General Motors in 2009 to stop both companies from going bankrupt. Obama “socialized” the car companies, conservatives argued at the time. The White House’s decision with Intel is functionally similar to what happened with Chrysler and GM. The major difference is that Obama’s takeover was a temporary measure in a financial crisis, while Trump is taking ownership in the hope of a long-term benefit for U.S. technology.

Trump has tried to make that distinction. The Intel deal is “an investment. We’re not bailing them out,” he said. Trump said he converted nearly $9 billion in grants the Biden White House had already given to Intel into equity for the U.S. government. By doing so, he said, he created a $10 billion to $11 billion windfall for U.S. taxpayers. “Why are ‘stupid’ people unhappy with that?” he added.

Conservatives are far from stupid, of course. Larry Kudlow, Trump’s former top economic adviser, told Fox Business he was “very, very uncomfortable with that idea.” Steve Moore, an informal Trump economic adviser, was even more blunt: “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.”

A National Review editorial warned that “government shouldn’t get into the chip business.” Senator Thom Tillis, Republican of North Carolina, said he was “stunned and alarmed” that the Trump administration was effectively nationalizing an American company and called the deal a risk of creating a “semi-state-owned enterprise a la CCCP” — the old Soviet Union. Senator Rand Paul, Republican of Kentucky, pointed to the same problem on X: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

Liberal Senator Bernie Sanders, meanwhile, was on the other side of the aisle, celebrating the Trump administration’s intervention in the chip market. He has for years endorsed what used to be known as industrial policy — the use of government power to subsidize and otherwise influence how businesses are shaped. Commerce Secretary Howard Lutnick leapt to Trump’s defense, telling Laura Ingraham, “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, was more equivocal. As part of the government contract, Intel had to file a statement with the Securities and Exchange Commission explaining that the arrangement could cause the company “to lose, or not to pursue, future grants or other awards from the U.S. Government,” “harm our reputation and business worldwide,” and face “increased governmental oversight and intervention in our business.”

Intel has been on the ropes for some time now. The company announced in March that it would be cutting 15% of its workers. Intel’s market capitalization is hovering at around $110 billion — down 50% since the start of 2024. Its stock price did rise by 4% immediately after Trump’s announcement.

The Wall Street Journal reported that Trump at first demanded the resignation of Intel CEO Lip-Bu Tan over past connections to China, but Trump softened his stance after a personal meeting in the White House.

“I liked him a lot, I thought he was very good,” Trump said afterward. Trump said he would let Tan “stay and see how he does,” but that he had every intention of ousting the CEO if the company failed to improve.

The government contract does say the U.S. government will be a non-voting shareholder in Intel, and Trump’s former advisers at Treasury have said the U.S. government will not try to influence Intel’s business decisions or management. But critics note that when the president of the United States is also your company’s largest shareholder, intervention is nearly inevitable.

If Intel rights itself and bounces back, Trump will claim credit for bolstering the American tech industry. If it continues to decline, U.S. taxpayers will pay. And if Trump follows through on his promise to do many more of these deals, many of them sure to be much larger in scope, this may just be the opening salvo of a much broader policy shift.

In the meantime, the Intel deal is the latest example of just how much Trump has remade the Republican Party. As Trump has steered away from his party’s economic orthodoxies, the Intel deal has become another example of the fundamental change in the relationship between the federal government and the private sector.