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President Donald Trump made the federal government Intel’s largest shareholder in the chipmaker in the latest sharp departure from Republican economic orthodoxy. He authorized Treasury to take a 10% stake in the ailing American company.

Conservatives who normally support Trump have reacted with shock and condemnation. “I was really horrified” at the news, former Trump economic adviser Larry Kudlow said on Fox Business on Monday. Trump’s own vice president and Intel’s lead customer says the decision was “a travesty of capitalism.” But Trump himself has boasted that the government is making a smart investment by buying into the chip giant.

“I think we’re going to make a lot of money off of that, I really do,” he told the AP this week. “It’s going to make us rich, richer and richer,” Trump said during a White House appearance. The deal has the “absolute potential to be the very beginning” of government investment in other companies, Trump said on Twitter. “I hope I’m going to have many more cases like it,” he added.

It’s a move that recalls what economists used to call industrial policy, with government directly involved in supporting and even determining the future of entire industries. The development has prompted many on the right to ask where the line against socialism is drawn. For generations, socialism has been defined in part as government control of the means of production for the good of society. The Republican Party has railed against the socialist policies of foreign rivals such as China and Russia. By that definition, Trump’s move looks less and less different.

The political irony is thick. When former President Barack Obama took control of Chrysler and General Motors during the financial crisis of 2008–2009, the move was generally regarded by conservatives as a last-ditch effort to save iconic American companies from the abyss. Trump allies say that if Obama had taken a 10% stake in Intel, conservative media would have accused him of communism.

But Trump has a case to make that this situation is different. Instead of bailing out Intel, Trump is actually investing in a company, moreover, that has struggled even with a virtual monopoly on key U.S. technology and while raking in billions in profit. Trump converted nearly $9 billion in grants (money Congress had already appropriated to the company, but under President Joe Biden’s bipartisan Chips Act) into equity for the federal government. By that logic, the Treasury claims the deal created $10 billion to $11 billion in value for taxpayers overnight. “Why are ‘stupid’ people unhappy with that?” Trump tweeted.

The initial reaction from conservative circles has been as fast as it is furious. Trump’s former top economic adviser, Larry Kudlow, was “very, very uncomfortable with that idea,” he said on Fox Business. Steve Moore, another long-time informal adviser, was even more withering. “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,” Moore wrote on Twitter.

National Review published an editorial titled “Government Shouldn’t Get Into the Chip Business,” arguing that the move was simply the government picking winners and losers. Senator Thom Tillis warned the deal “effectively has created a semi-state-owned enterprise a la CCCP, if not the Former Soviet Union.” Senator Rand Paul highlighted the same point on social media: “Wouldn’t the government owning part of Intel be a step toward socialism? Terrible idea.”

Not everyone has been so critical. Progressive Senator Bernie Sanders called the decision “excellent” and a sign that the government can wield its power to shape industry for public benefit. Commerce Secretary Howard Lutnick rushed to Trump’s defense, telling Laura Ingraham on Monday, “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 itself has sounded warnings that the agreement could curtail its ability to get future grants from the government, damage its global sales, and subject the company’s decisions to more onerous regulation. Intel is already reeling, having laid off 15% of its staff earlier this year. The company’s stock value is at about $110 billion (down 50% from the start of 2024), though its share price rose 4% immediately after Trump’s announcement.

The Wall Street Journal reported that Trump initially demanded Intel CEO Lip-Bu Tan resign over his past ties to China, but changed course after a White House meeting with the executive. “I liked him a lot, I thought he was very good,” Trump said afterward.

Critics are unconvinced that the U.S. government will be a hands-off, non-voting shareholder. If Intel stabilizes and recovers, Trump will be able to claim credit for his role in strengthening an American technological pillar. If the company continues to struggle, however, the taxpayers will have to bear the loss. With Trump openly promising to take similar actions with other companies, the question of whether what he’s doing is socialism, capitalism, or just Trumpism is about to get a lot louder.

At the very least, Trump’s Intel stake is a signal of a fundamentally different relationship between the federal government and the business community, and just how far Trump has altered the Republican Party’s approach to economic policy.