Kevin Hassett warns against government ownership of Intel, calls situation ‘very serious’

Kevin Hassett, Director of the White House National Economic Council, is drawing a line in the sand. While the Trump administration moves forward with acquiring a roughly 10% non-voting equity stake in Intel, Hassett wants everyone to know this shouldn’t become a habit.

The deal and its discontents

The US government announced it would take a stake of approximately 9.9% to 10% in Intel, amounting to roughly 433.3 million non-voting shares valued at around $8.9 billion. The funding comes from a portion of approximately $11.1 billion tied to the CHIPS and Science Act, the landmark legislation designed to bring semiconductor manufacturing back to American soil.

Hassett described the arrangement as a “very, very special circumstance” during a CNBC appearance on August 25, 2025, and described full government ownership of Intel as “extreme.”

Intel reported losses of nearly $19 billion in one year and another $3.7 billion in the first half of the following year. The investment modifies benchmarks originally set during the Biden administration’s CHIPS initiative, essentially reworking an existing framework rather than building one from scratch.

Conservative backlash hits fast

The deal was announced around August 22, 2025. Hassett’s comments came three days later. And by August 26 through 29, conservative commentators and economists were already raising objections.

The Manhattan Institute and Cato Institute both raised concerns about government overreach and the potential slide toward state capitalism. Critics argued that expanding federal stakes in private companies risks undermining the very market dynamics that made American tech dominant in the first place. The word “cronyism” was raised by critics of the deal.

Intel’s financial reality

Intel has been losing ground to competitors like TSMC and AMD, falling behind on manufacturing technology while watching its market share erode. The company’s SEC filings have highlighted risks to revenue from international customer relationships.

The non-voting nature of the shares means the government gets exposure to Intel’s financial performance without a seat at the decision-making table. That’s by design, meant to address concerns about political interference in corporate strategy.

What this means for investors

Hassett has hinted at the possibility of similar investments in other sectors, which would represent a significant departure from traditional US economic policy. Economic observers have raised concerns about the implications of a model that might resemble an equity fund for the state, potentially disadvantaging private investment and innovation in the sector.

The CHIPS Act was designed to solve a geopolitical problem, not necessarily a financial one, and Intel’s SEC filings have already flagged revenue risks from international customer relationships as an additional layer of uncertainty.

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