Bernie Sanders and Donald Trump form an unlikely alliance over billions in chipmaker subsidies

Strange bedfellows

Markets recoil

Eva is a fellow on Fortune's news desk.

U.S. Sen. Bernie Sanders (I-Vt.) has been a longtime political enemy of President Donald Trump. However, in a political plot twist, Sanders, considered a progressive, has lined up behind his foe’s plan to turn multibillion-dollar semiconductor subsidies into government equity stakes in private companies. 

The unlikely duo—a self-described democratic socialist from Vermont and a populist-leaning Republican president—now agree on one shift in America’s industrial policy: If the government is going to hand out billions, taxpayers should own a piece of the pie.

“If microchip companies make a profit from the generous grants they receive from the federal government, the taxpayers of America have a right to a reasonable return on that investment,” Sanders told Fortune.

The subject of this unprecedented convergence is Intel, the struggling chipmaker that received $10.9 billion under the 2022 CHIPS and Science Act. The injection was part of a broader $39 billion subsidy designed to lure semiconductor production away from Asia. The Trump administration is now pushing to exchange some of those grants for government ownership stakes, which rattled markets and sent Intel’s stock plummeting 6% since the announcement. 

Intel declined to comment.

The idea was Sanders’ in the first place, he said. 

Sanders has long criticized the CHIPS Act as corporate welfare for some of the world’s most profitable technology companies. Back in 2022, he and U.S. Sen. Elizabeth Warren (D-Mass.) proposed an amendment requiring the Treasury Department to take warrants, equity stakes, or senior debt whenever federal money went to private chipmakers. However, that amendment failed.

Now, three years later, Trump is reviving the idea, and Sanders is applauding.

“I am glad the Trump administration is in agreement with the amendment I offered three years ago,” Sanders said. “Taxpayers should not be providing billions of dollars in corporate welfare to large, profitable corporations like Intel without getting anything in return.”

For Trump, the move represents a dramatic embrace of state intervention in the private sector, a tactic he has increasingly leaned on in his second term. This month, Trump called for Intel’s CEO Lip Bu-Tan’s resignation over past ties to Chinese firms. Earlier this year, the administration struck a deal allowing Nvidia and AMD to sell AI chips to China in exchange for Washington pocketing 15% of the revenues. 

It’s an economic strategy that looks less like Reaganism, and more of a mashup between populism and state-capitalism. In that case, Trump and Sanders are two apt representatives for the merging camps. 

The White House did not respond to Fortune’s request for comment

Investors aren’t thrilled

The Commerce Department, led

For Sanders, it’s validation; and for Trump it’s a newfound strategy. But for Intel, which was once the undisputed king of U.S. chipmaking, it’s yet another twist in an already turbulent year.