The Trump administration's deepening intervention in America's semiconductor industry is drawing sharp criticism from historian Walter Isaacson, who called the White House's push for an Intel stake and revenue-sharing deals with Nvidia and AMD a "scattershot method of crony capitalism" that threatens to undermine competitive markets through political favoritism.
The Trump administration's unprecedented meddling in the semiconductor industry just hit a new level of controversy. Walter Isaacson, the Tulane University professor famous for his recent Elon Musk biography, delivered a scathing assessment of the White House's chip strategy, calling it 'crony capitalism' that could backfire spectacularly.
The criticism comes as Washington doubles down on micromanaging America's most critical technology sector. The White House is actively pursuing an equity stake in struggling chipmaker Intel, according to CNBC reporting, while simultaneously extracting tribute from competitors. Both Nvidia and Advanced Micro Devices recently agreed to hand over 15% of their China revenues to the U.S. government in exchange for export licenses to sell AI chips in the world's second-largest market.
'That state capitalism often evolves into crony capitalism, where you have favored companies and industries that pay tribute to the leader, and that is a recipe for not only disaster, but just sort of a corrupt sense of messiness,' Isaacson told CNBC's Squawk Box Thursday morning. His blunt assessment reflects growing unease in Silicon Valley about political interference in market dynamics.
The government intervention reaches far beyond typical regulatory oversight. Trump personally attacked Intel CEO Lip-Bu Tan as 'highly CONFLICTED' and demanded his resignation, according to White House statements. The chipmaker's stock has cratered 60% this year amid manufacturing delays and competitive pressure from , making it a tempting target for government equity participation through CHIPS Act funding.
