When governments become top shareholders, corporate focus shifts from pleasing customers to securing political favor and appropriations. R&D budgets are reallocated to lobbying, and market competition devolves from building the best product to playing the policy game most effectively, strangling innovation.

The legal basis for taking equity stakes in firms like Intel is not explicit authorization. Instead, the administration relies on the fact that laws like the CHIPS Act don't expressly forbid it, coupled with the low likelihood of a legal challenge from the benefiting companies.

Activists can be effective even in companies with dual-class shares or founder control. The mechanism for influence is not the threat of a proxy fight but the power of good ideas and relationships to achieve strategic alignment with the controlling party.

The U.S. is shifting from industry supporter to active owner by taking direct equity stakes in firms like Intel and U.S. Steel. This move blurs the lines between free markets and state control, risking a system where political connections, not performance, determine success.

When facing government pressure for deals that border on state capitalism, a single CEO gains little by taking a principled stand. Resisting alone will likely lead to their company being punished while competitors comply. The pragmatic move is to play along to ensure long-term survival, despite potential negative effects for the broader economy.

Effective private equity boards function as strategic advisory councils rather than governance bodies. Board members are expected to be co-investors who actively help with strategy, networking, and operational challenges like procurement, making them a key part of the value creation engine.

When the U.S. government becomes a major shareholder, it can create significant challenges for a company's international operations. Foreign governments and customers may view the company with suspicion, raising concerns about data privacy, security, and its role as a potential tool of U.S. policy.

Historically, the U.S. government has only taken equity in private firms during bailouts with the goal of exiting quickly. Recent deals with companies like Intel represent a new strategy of long-term investment to bolster specific industries, a marked departure from past policy.

The government's equity stake in Intel replaced a milestone-based grant system. This delinks the funding from specific performance targets, like building fabs, converting the deal into a higher-risk bet on the company's overall success rather than a payment for specific outcomes.