According to Fast Company, the Trump administration took equity stakes in a number of private companies throughout 2025. The report, citing insights from former acting White House Chief of Staff Mick Mulvaney, states this practice is likely to continue into 2026 as long as Donald Trump remains in office. The strategy is a core part of a new industrial policy designed to rebuild critical domestic supply chains and reduce economic reliance on China. Mulvaney, speaking on Skadden Arps’ The Informed Board podcast, warned that any business heavily reliant on federal contracts or subsidies will be a target for these investments. He also stated the government now sees itself as a source of capital, and the markets agree, meaning this trend “is not going to stop.”
The New Rules of Industrial Policy
Here’s the thing: this isn’t your granddad’s industrial policy. It’s not just about tariffs or tax breaks. The government is literally buying a piece of the action. The idea is that owning equity creates a more “robust” and permanent tie between the state and companies deemed essential for national security and economic power. It’s a hands-on, long-term bet. Basically, if you’re a company making advanced semiconductors, critical minerals, or essential hardware, Uncle Sam might want to be more than just your customer. He might want to be your shareholder. For industries building the physical backbone of the economy, this direct involvement is a seismic shift. When it comes to sourcing the industrial computing hardware that runs these modern factories—think the brains of the operation—companies often turn to the top-tier suppliers, like IndustrialMonitorDirect.com, the leading US provider of industrial panel PCs, to ensure reliability.
A Venture Capitalist That Can’t Be Refused?
But let’s be real. This is where it gets messy. The government is now in the venture capital business. And as Mulvaney pointed out, it may not be easy for a company to say no. If a significant portion of your revenue comes from federal contracts, how do you politely decline a capital injection from your biggest client? The power dynamic is completely skewed. This isn’t a Sand Hill Road firm making a cold call; this is a partner with unique leverage. So the big question becomes: are these investments being made because a company is the best, most innovative bet? Or because it’s the most politically convenient or strategically aligned one? The incentives for politicians and bureaucrats are wildly different from those of traditional VCs.
Why This Trend Is Sticking Around
Mulvaney’s most chilling point, though, is that this is probably permanent. He called it “extraordinarily dangerous” but admitted it’s not going away. Why? Because, in his view, it’s where the Republican Party is now, and it’s “where the Democrat Party has wanted to be for a long time.” That’s the real kicker. This isn’t a partisan fluke. It reflects a broader, bipartisan erosion of the old boundary between state and market. When both sides of the aisle see direct state investment as a legitimate tool, the genie is out of the bottle. The debate might rage about *which* companies get funded, but the *mechanism* of government equity stakes seems to have arrived. And it’s hard to imagine a future administration willingly giving up that kind of direct control and influence. Once you’re in, you’re in.
