US Treasury Secretary Scott Bessent said on August 28, 2025, that the government does not plan to buy a stake in Nvidia, despite increasing involvement in companies considered strategically important.

Bessent, speaking to Fox Business, said Nvidia does not require financial support and suggested other sectors like shipbuilding could eventually receive government investment.

His remarks follow the Trump administration’s decision to convert about US$11 billion in subsidies and grants into a nearly 10% ownership stake in Intel, making the US government the company’s largest shareholder.

Analysts and investors have expressed concern over the government’s growing influence in publicly traded firms, with some warning that such moves set a precedent for direct state intervention.

Government stakes in strategic industries are more common in Europe and Asia, notably in China’s SMIC.

🔗 Source: Quartz

🧠 Food for thought

1️⃣ Government semiconductor intervention follows historical precedent despite “free market” rhetoric

The Intel stake represents a return to the government’s foundational role in building America’s chip industry, despite decades of free-market messaging from Washington.

Federal contracts were crucial for early semiconductor development, with the Air Force and NASA serving as major customers for integrated circuits in the 1960s, providing the stable demand that allowed companies like Texas Instruments and Fairchild to scale production2.

Between 1976 and 1995, federal support for university computer science research alone grew from $65 million to $350 million, creating the talent pipeline that built Silicon Valley3.

The current Intel intervention mirrors this pattern. The government steps in when private markets fail to support strategically important capabilities, just as it did during the Cold War when national security demanded domestic semiconductor production.

Even Silicon Valley’s origin story, often told as pure entrepreneurial triumph, was deeply dependent on government defense contracts and research funding that provided both capital and early customers4.

2️⃣ Selective intervention reveals government’s winner-picking strategy in strategic industries

Bessent’s contrasting treatment of Nvidia versus Intel highlights how government now explicitly chooses which companies deserve support based on market performance rather than strategic importance alone.

While both companies operate in the same semiconductor space critical to AI development, Nvidia’s market dominance—holding 92% of the GPU market with stock gains of 871% since ChatGPT’s launch—shields it from government intervention5.

Recent Nvidia developments