The US government has quietly become one of the more active investors on Wall Street, and not everyone is comfortable with that.
Since early 2025, the Trump administration has executed roughly 30 equity and quasi-equity transactions totaling nearly $27 billion, converting federal grants and loan authorities into direct ownership stakes in private companies. The government now holds a 10% equity stake in Intel and a 15% stake in MP Materials, both tied to CHIPS Act funding and the Defense Production Act.
How it got here
The execution is where things get complicated. Legal frameworks for these transactions are drawing scrutiny, and an Intel shareholder lawsuit is already challenging the legitimacy of the government’s equity demands tied to CHIPS Act funding. The plaintiffs argue the legal basis for those equity claims is shaky, a finding that, if upheld, could unwind some of the administration’s most prominent deals.
The numbers working against the policy
Public sentiment is not helping the administration’s case. A July 2026 CNBC poll found that 49% of voters view government ownership stakes in US companies as inappropriate, while only 19% expressed support.
Among economists, the skepticism runs even deeper. A Kent Clark survey found that 67% of finance economists believe government equity stakes are detrimental to corporate performance. A larger share, 82%, say government ownership harms governance practices.
Rep. Pat Harrigan has flagged what he calls “unintended consequences” when the government takes equity positions in firms it also regulates and contracts with. Sen. Rick Scott has been more blunt, describing government investment in private companies as a measure of “last resort” rather than a feature of industrial policy.
What investors are actually watching
For market participants, the near-term picture is mixed. Companies that received equity-linked federal backing got a short-term boost when deals were announced. Intel and MP Materials both benefited from the implied government endorsement.
If Democrats retake Congress in the 2026 midterms, legislative pressure to unwind or restrict these equity arrangements becomes a real scenario. That introduces a category of political risk that most institutional investors are not accustomed to pricing into semiconductor or defense holdings.
A company negotiating a contract with the Pentagon while the Pentagon holds a meaningful equity stake in that company is navigating a conflict of interest that has no clean resolution.
Some institutional investors are beginning to treat government-linked equity as its own risk category, separate from standard regulatory exposure, shaped by election cycles and legislative calendars rather than earnings cycles and product roadmaps.