Trump administration considers equity stakes in defense contractors

In August 2025, Commerce Secretary Howard Lutnick announced that the Trump administration is contemplating taking ownership stakes in U.S. defense contractors. This decision follows their recent acquisition of a 10% stake in Intel, which involved an investment of approximately $8.9 billion. During an interview on CNBC's "Squawk Box," Lutnick highlighted that military leaders within the Trump administration are evaluating this strategic move, noting that companies like Lockheed Martin derive 97% of their revenue from government contracts, essentially operating as extensions of the U.S. government. Lutnick emphasized the economic rationale behind potentially acquiring stakes in these defense firms, suggesting that the administration might gain greater control and ensure favorable terms due to the substantial amount of taxpayer dollars flowing into these companies. Lockheed Martin's stock saw an increase in value following Lutnick's comments, underscoring investor confidence in government partnerships. Previously, President Trump expressed a strong commitment to profit from these kinds of business arrangements, highlighting their potential to create employment and bolster the economy. The conversations around equity stakes in defense firms come amidst heightened discussions regarding the U.S. military budget and defense spending. Lutnick's remarks also indicate a possible shift in the Republican Party’s traditional stance on government involvement in private business, signaling a move towards greater federal influence in industries critical to national security. As such, this recent direction raises questions about the implications for corporate governance and the future relationship between private defense contractors and the federal government. In light of the current geopolitical climate and national security concerns, Lutnick's statements could herald significant changes in how the Trump administration engages with and supports large-scale defense projects. The announcement of the government owning a stake in Intel correlates with a trend where the government has begun investing directly in key technological sectors to ensure domestic production and innovation. This approach could pave the way for similar arrangements with other pivotal sectors, further intertwining government interests with private enterprise in America.