Lutnick says feds could take stake in defense contractors

Lutnick says feds could take stake in defense contractors
by Jake Thomas
Washington DC (UPI) Aug 26, 2025

Commerce Secretary Howard Lutnick said Tuesday that the Trump administration is considering taking an ownership stake in Lockheed Martin and other defense contractors that profit from U.S. government spending.

Lutnick made the comments on CNBC's Squawk Box days after the Trump administration announced the government will own 10% of U.S. chipmaker Intel's common stocks in exchange for $11 billion in previously committed federal grants.

The unusual arrangement with Intel has raised eyebrows as the federal government takes a direct stake in the beleaguered Santa Clara, Calif.-based company. Lutnick's remarks are the latest indication the Trump administration is seeking more direct control of private companies in a way that was once anathema to the Republican Party.

"There's a monstrous discussion about defense," Lutnick said during the interview. "Lockheed Martin makes 97% of their revenue from the U.S. government. They are basically an arm of the U.S. government."

Lutnick said he would defer to the Pentagon on any future moves to acquire stake in defense contractors. He added that "these guys are on it, and they're thinking about it."

The federal government's 10% stake in Intel is equivalent to the amount of money the company has received or is expected to receive under the CHIPS and Science Act. Signed into law by President Joe Biden in 2022, the CHIPS act aims to supercharge the domestic production of semiconductor chips and other technologies that are vital to a vast range of products including computer, automotive parts and medical devices.

The CHIPS act gave large amounts of federal money to private companies. Biden highlighted the act's success last year, saying tech companies committed to more than $395 billion in investments since the law took hold.

In an address to Congress earlier this year, Trump has called the act a horrible, horrible thing" that gives hundreds of billions of dollars to companies that don't want to spend it.

Lutnick said in the interview that things will change under Trump.

"The way it has been done has been a giveaway," he said.

Japan-based Nippon Steel finalized its acquisition of U.S. Steel in June under an agreement that gave Trump a "golden share" that granted him veto power over the change of the company's name or its relocation.

Similarly, chipmakers Nvidia and Advanced Micro Devices agreed to pay 15% of their sales to China to the U.S. treasury in exchange for approval to sell their high-tech semiconductors to rival country.