Governments worldwide have a long history of holding stakes in private companies, often for strategic or economic reasons.

In the United States, this practice is not new. A notable example is the government’s intervention during the 2008 financial crisis, which included a large stake in General Motors. More recently, the U.S. government announced it has acquired a 10% stake in semiconductor giant Intel.

In a highly unusual move, the U.S. government has announced a deal to acquire a 9.9% equity stake in Intel, making it one of the company’s largest shareholders. The investment, valued at $8.9 billion, is being funded by converting previously allocated grants to Intel under the CHIPS and Science Act and an additional $3.2 billion from the Secure Enclave program. The deal, which comes after President Trump called for Intel’s CEO to resign, is aimed at boosting domestic semiconductor production and reducing reliance on foreign manufacturing. Intel’s stock saw a notable surge following the announcement.

The financial performance of government-owned companies varies greatly. Studies have shown that some state-owned enterprises (SOEs) may be less profitable than their private counterparts, potentially due to political influence and a focus on social objectives over profit maximization.

However, government ownership can also provide stability and access to capital, particularly for industries deemed critical for national security or economic stability. This dual role—as both a shareholder seeking returns and a policymaker with broader goals—creates a complex dynamic for these companies’ financial performance.