Unprecedented Government Ownership in Private Companies Signals Major Economic Shift
Washington D.C., Saturday, 7 February 2026.
Breaking historical norms, the administration now holds equity in over ten private companies, including a powerful “golden share” in U.S. Steel, raising urgent concerns about market fairness and state intervention.
A Radical Departure from Free Market Norms
The Trump administration has fundamentally altered the landscape of American capitalism by acquiring equity stakes or entering agreements to take stakes in at least 10 U.S. companies over the past year [1][2]. This strategy, which Commerce Secretary Howard Lutnick and Interior Secretary Doug Burgum articulate as a necessary measure to reduce dependence on Taiwan for semiconductors and China for critical minerals, represents a shift from mere regulation to active ownership [1]. Unlike historical precedents where government equity was a temporary feature of distress bailouts, such as the 1980 Chrysler intervention or the 2008 financial crisis, the current portfolio targets strategic industries for long-term industrial policy goals [1][6]. The scope of this intervention is broad, ranging from a 10% stake in semiconductor giant Intel acquired in August 2025 to a potential 15% interest in rare earth miner MP Materials agreed upon in July 2025 [2].
The Growing Government Portfolio
The administration’s investment activity has accelerated significantly leading up to today, February 7, 2026. On January 26, 2026, the Commerce Department issued a letter of intent to provide USA Rare Earth with a $1.3 billion loan and $277 million in federal funding, marking the latest expansion of state influence in the critical minerals sector [2]. In the semiconductor space, the Commerce Department purchased 433.3 million shares of Intel at $20.47 per share in August 2025 [2]. This transaction alone represents an investment of approximately 8869.651 million dollars, funded by CHIPS Act grants [4]. Furthermore, the administration has ventured into the nuclear energy sector; in October 2025, a deal was signed to finance Westinghouse nuclear plants, with provisions that could allow the government to require an IPO by January 2029 if the company’s valuation exceeds $30 billion [2].
Governance and the ‘Golden Share’
Perhaps the most distinct example of this new governance model is the administration’s intervention in U.S. Steel. Following the company’s delisting from the NYSE in June 2025 after becoming a subsidiary of Nippon Steel, President Trump secured a “golden share” as a condition for approving the acquisition [2]. This unique instrument grants the President veto power over key business decisions, effectively embedding the White House into the corporate boardroom without requiring majority economic ownership [2]. While Secretary Lutnick stated in August 2025 that the government’s stake in Intel is non-voting, the existence of such powerful oversight mechanisms in other sectors raises questions about the operational autonomy of private firms [1]. For instance, President Trump stated in January 2026 that he “will not permit” defense companies to issue dividends or stock buybacks until they accelerate production, signaling a willingness to exert direct control over capital allocation [1].
Market Distortions and Conflicts of Interest
The integration of federal interests into private equity structures has drawn sharp criticism regarding market fairness and potential conflicts of interest. Scott Lincicome, a trade lawyer affiliated with the Cato Institute, warns that government backing creates an “invisible barrier” to startups, asking, “Why would you ever want to enter a market that you know your chief competitor is backed by the U.S. government?” [1]. These concerns are compounded by personal entanglements; for example, Secretary Lutnick’s former firm, Cantor Fitzgerald, led the placement for the $500 million private funding USA Rare Earth was required to raise [1]. Although Lutnick transferred his stake in the firm to his children upon joining the administration, the optics remain contentious [1]. Citadel CEO Ken Griffin voiced this unease on February 3, 2026, stating that corporate executives find this interventionist approach “incredibly distasteful” as it “tastes of favoritism” [1].
Strategic Sovereignty vs. Investor Risk
Proponents argue that these measures are essential for national security. Daleep Singh has described such investments as occupying a “sweet spot” for projects requiring massive upfront capital with long timelines to profitability, such as those in the critical minerals sector where companies like MP Materials operate [6]. To support this sector further, the administration launched Project Vault on January 27, 2026, a public-private stockpile initiative, and announced plans for a $12 billion critical minerals stockpile on January 30, 2026 [4][5]. However, the risks to shareholders are tangible. MP Materials has warned investors of potential “government audits, investigations, congressional scrutiny,” and conflict of interest inquiries [1]. As the administration continues to consider stakes in major defense contractors like Lockheed Martin, the line between public interest and private enterprise continues to blur, creating a complex environment for investors navigating this new era of state-sponsored capitalism [1][2].