White House extends equity push from Intel to defence sector

New age of state capitalism

The Trump administration is weighing the possibility of taking equity stakes in major US defence contractors, commerce secretary Howard Lutnick confirmed this week, in what analysts describe as a dramatic expansion of Washington’s role in corporate America.

Speaking to CNBC, Lutnick said the Pentagon is considering ownership positions in companies such as Lockheed Martin, Boeing and Palantir to support financing of munitions procurement. “Lockheed Martin makes 97% of its revenue from the US government. It’s basically an arm of the US government,” he said. Independent estimates, however, put the figure closer to 70% - 75%.

Shares in the targeted firms rose following his comments, with Lockheed up 1.7% and Boeing 2.1% in midday trading. Lockheed said it would continue working closely with the administration “to strengthen national defence,” while Boeing declined to comment.

A new era of state-backed industry

The remarks come just days after Washington acquired a near-10% stake in Intel, part of a wider attempt to secure semiconductor production. The administration has also taken a “golden share” in US Steel and invested in rare earths producer MP Materials. A revenue-sharing deal with Nvidia and AMD over China sales added to the pattern of direct government involvement.

The moves have sparked warnings from investors and policymakers who argue that buying into profitable, healthy companies represents an unprecedented shift towards state capitalism. Some analysts suggest the growing portfolio could evolve into a US sovereign wealth fund, though experts note that such funds often struggle with politicisation and poor returns.

Investor and political pushback

Critics have also raised concerns over governance, warning that boards shielded by a government shareholder may feel emboldened to override investor interests. Senator Todd Young, a Republican from Indiana, said the Intel stake was “not the intended purpose” of federal semiconductor subsidies.

Treasury secretary Scott Bessent has since downplayed Lutnick’s defence comments, adding there are no plans to take a position in Nvidia but leaving the door open to selective intervention in strategic sectors such as shipbuilding.

President Trump has defended the approach, saying he would pursue such deals “all day long” as part of a strategy to strengthen national industry and protect supply chains. Support has come from unexpected quarters, with Senator Bernie Sanders backing the Intel stake as a safeguard for US jobs.