*

Critics warn government stakes limit corporate strategy,

market

agility

*

Analysts also raised questions about how the Intel ( INTC ) deal

will

affect customers

*

White House says US needs to develop more production

capacity in

critical industries

By David Gaffen and Susan Heavey

WASHINGTON, Aug 25 (Reuters) - U.S. President Donald

Trump said he wants to make more investments in healthy U.S.

companies on Monday. Whether Corporate America is on board is

another story.

The White House announced a near-10% stake in chipmaker Intel ( INTC )

on Friday that converts government grants into an

equity share.

Trump on Monday doubled down on the idea of deals in other

sectors similar to the one announced with Intel ( INTC ).

The administration's approach does away with decades of

thinking about the U.S. economy, where the government took

corporate stakes in rare emergencies like the 2008 global

financial crisis and the subsequent bailout of U.S. auto

companies. Intel ( INTC ) is struggling, but it still has a cash cushion

of $9 billion and a market value of $105 billion.

To critics, the Intel ( INTC ) move - along with the White House's

full-court press to get the U.S. Federal Reserve to lower

interest rates, its use of emergency powers to slap tariffs on

imported goods and involvement in different mergers - threatens

the business world's nimbleness.

"We're moving from a pure capitalistic economy to a much

more state-engaged economy. ... That's a huge change for America

and over where we've been. I've never seen an era like this,"

said Bill George, former Medtronic CEO and executive education

fellow at Harvard Business School.

"I will make deals like that for our Country all day long,"

Trump said in a post on Truth Social on Monday, touting the

company's rising stock price.

Trump said in his post that he would help companies that make

similar "lucrative" deals with U.S. states, but didn't provide

details. Intel ( INTC ) had promised to use the CHIPS Act money to build

plants in the United States.

However, the risks of the government's involvement are no more

apparent than in Intel's ( INTC ) own regulatory filing on Monday, where

it laid out several new risk factors to having the government

invested in the company - from potentially harming international

sales, to limiting the chipmaker's ability to secure future

government grants, or subjecting the company to additional

regulations or restrictions in other countries.

Intel ( INTC ) CEO Lip-Bu Tan went a step further in a video posted

on Monday by the Commerce Department, saying, "I don't need the

grant."

He added: "But I really look forward to having the U.S.

government be my shareholder."

Analysts also raised questions about how the Intel ( INTC ) deal will

affect customers.

"Is it conceivable that as part of something like this the

administration might 'encourage' customers to use Intel's ( INTC )

capacity?" Bernstein analyst Stacy Rasgon wrote in a note on

Tuesday.

Intel ( INTC ) is not the only company where Trump has become personally

involved.

The White House intervened to complete the purchase of U.S.

Steel by Japan's Nippon Steel in June, taking what Trump called

a "golden share" that gives Washington say over its operations.

It took a stake in rare earths company MP Materials ( MP ) as

well, and on Monday, White House economic advisor Kevin Hassett

said the government could take additional stakes in other

companies.

"Companies that are nationalized in whole or in part don't

do as well, because they're restricted from making the kinds of

strategic decisions that would be solely market-based," said

Nell Minow, chair of Portland, Maine-based ValueEdge Advisors.

The White House argues that the United States needs to

develop more production capacity in critical industries rather

than outsource that manufacturing to other countries.

Numerous CEOs met with Trump shortly after his re-election in

November 2024, and that parade of visitors has continued into

his term. It has yielded the likes of Apple ( AAPL ) CEO Tim

Cook giving Trump a present of a customized souvenir plaque with

a 24-karat gold base mined from Utah earlier in the month.

Apple ( AAPL ) - one of the biggest companies in the world, with a market

value north of $3 trillion - has been trying to shift production

away from China, which Trump targeted in his first-term trade

war, to India, a move Trump has also criticized. Apple ( AAPL ) has

announced roughly $600 billion in planned investment in the

United States, though the White House has suggested it could

also build smartphones domestically.

The United States does not have significant capacity to make

smartphones.

"I think companies are just starting to realize, how much

control do you want to give up and how much ownership do you

want to give up to the government?" George said.