US Administration Plans Stakes in Defense, Intel Companies

The Trump administration, led by Commerce Secretary Howard Lutnick, is considering taking equity stakes in key U.S. defense contractors such as Lockheed Martin, describing these companies as effectively extensions of the government due to their heavy reliance on U.S. defense contracts. This move follows recent government acquisitions including a near-10% stake in Intel, a preferred stock purchase in rare earths company MP Materials, and a "golden share" in U.S. Steel that grants veto power over business decisions. The administration's strategy aims to increase federal involvement in strategic industries to secure supply chains and finance munitions acquisitions, a shift that has sparked debate over potential impacts on corporate autonomy and market dynamics. President Trump has expressed support for expanding government investments in healthy American companies, emphasizing flexibility in adjusting rules to support businesses seeking federal aid. Despite some criticism about government intervention, these actions reflect a broader effort to exert greater control over defense and critical technology sectors. Market responses to these announcements have been mixed, with some defense company shares rising and others declining.