The Commerce Department reports government stakes in six more companies. 
Routine Practice
CATO reports Government Ownership Stakes in Companies Becoming Routine Under Trump
The Commerce Department announced this week that six more companies are set to join the federal government’s rapidly expanding corporate portfolio, bringing the total to 30 by our count. Perhaps most striking about the announcement is how unremarkable government ownership is becoming.
The seven nonbinding letters of intent would provide up to $874 million in CHIPS and Science Act research and development incentives. Six recipients would be new additions to the portfolio. The seventh, GlobalFoundries, already has a proposed Commerce stake attached to a separate $375 million quantum foundry award. Commerce says a minority, noncontrolling equity stake in each company will be a condition of final funding.
Zoom out and the pattern is more striking. Since December, the CHIPS Research and Development (R&D) Office has announced 19 final or proposed company awards totaling up to $3.8 billion. They cover 18 companies because GlobalFoundries has two separate projects. Three agreements are final, while 16 remain letters of intent. All 19 have been publicly tied to equity.
Commerce’s current funding rules state that award recipients may be required to provide equity, warrants, intellectual property licenses, royalties, revenue sharing, or other instruments to generate a government return. The Biden administration, by contrast, used the same CHIPS R&D appropriation through separate competitions to award funds to private companies without taking ownership stakes. That makes the Trump administration’s insistence on equity a policy choice. The CHIPS Act itself authorizes Commerce to make grants, cooperative agreements, and “other transactions” but doesn’t expressly authorize the department to acquire stock.
Commerce says that these stakes enhance the return for taxpayers, but even a profitable portfolio would not resolve the underlying institutional problem. The federal government is now acting as regulator, customer, financier, and shareholder. Decisions involving contracts, trade restrictions, permits, and additional subsidies can affect the value of its holdings. Competitors have reason to question whether the playing field is level. And if a portfolio company falters, Washington will have an added incentive to protect its investment with more taxpayer support.
Calling the stakes “minority” and “noncontrolling” does not eliminate those conflicts. Public announcements often reveal little about valuations, shareholder rights, oversight, or exit plans. Meanwhile, future administrations will inherit the same tool and can use it to assemble portfolios reflecting their own political priorities.
US Government Stakes in 30 Companies
- U.S. Steel/Nippon Steel 🔩 Steel 🏛️Committee on Foreign Investment Golden share with veto rights over major corporate decisions – June 2025
- MP Materials 🪨 Minerals “🛡️ Defense ” $400 million preferred stock and warrants, 15 percent if converted/exercised – July 2025
- Intel 🖥️ Semiconductors “🏢 Commerce ” $8.9 billion for 9.9 percent stake, plus 5 percent warrant if foundry ownership falls below 51 percent – August 2025
- Trilogy Metals 🪨 Minerals “🛡️ Defense ” Proposed $35.6 million for 10 percent stake, plus warrants for additional 7.5 percent stake – October 2025
- Lithium Americas 🪨 Minerals “🏭 Energy ” $184 million debt-service deferral, with 5 percent company warrants and 5 percent Thacker Pass Joint Venture (JV) investment – October 2025
- Westinghouse ⚡ Energy (nuclear) “🏢 Commerce ” 20 percent upside participation, convertible to equity warrant if initial public offering (IPO) conditions are met – October 2025
- Vulcan Elements 🪨 Minerals 🏢 Commerce 🛡️ Defense Proposed $50 million Commerce equity, conditional $620 million Defense loan plus warrants – November 2025
- ReElement Technologies 🪨 Minerals “🛡️ Defense ” Conditional $80 million Defense loan with warrants – November 2025
- Korea Zinc/Crucible Metals 🪨 Minerals 🏢 Commerce 🛡️ Defense $210 million CHIPS funding, Commerce gets indirect Korea Zinc stake through the Crucible JV; Defense $150 million of JV equity and $1.25 billion of JV debt financing – December 2025
- xLight 🖥️ Semiconductors “🏢 Commerce ” $150 million CHIPS funding, with Commerce equity stake – December 2025
- L3Harris/Missile Solutions 🚀 Rocket motors “🛡️ Defense ” $1 billion convertible preferred security in Missile Solutions, plus warrants; converts to common at IPO – January 2026
- Atlantic Alumina Company 🪨 Minerals “🛡️ Defense ” $150 million Defense preferred equity stake – January 2026
- USA Rare Earth 🪨 Minerals 🏢 Commerce Up to $277 million direct funding and up to $1.3 billion loan, with shares and warrants – January 2026
- GlobalFoundries ⚛️ Quantum computing “🏢 Commerce ” Proposed up to $675 million across two CHIPS LOIs: $375 million for a quantum foundry and $300 million for silicon photonics. A separate agreement gives Commerce an approximately 1% equity stake. – May 2026
- IBM/Anderson ⚛️ Quantum computing “🏢 Commerce ” Proposed $1 billion for a minority stake in Anderon; IBM will contribute $1 billion plus assets and intellectual property – May 2026
- Atom Computing ⚛️ Quantum computing “🏢 Commerce ” $100 million planned funding, with minority equity stake – May 2026
- Diraq ⚛️ Quantum computing “🏢 Commerce ” Up to $38 million planned funding, with minority equity stake – May 2026
- D-Wave Quantum ⚛️ Quantum computing “🏢 Commerce ” Proposed $100 million for $100 million equity stake at final award – May 2026
- Infleqtion ⚛️ Quantum computing “🏢 Commerce ” Proposed $100 million for common stock priced 15 percent below the lower of the letter of intent-date or final agreement market price – May 2026
- PsiQuantum ⚛️ Quantum computing “🏢 Commerce ” $100 million planned funding, with minority equity stake – May 2026
- Quantinuum ⚛️ Quantum computing “🏢 Commerce ” Proposed $100 million for common at lower of 20 percent below $60 IPO price or 15 percent below the award date closing price – May 2026
- Rigetti Computing ⚛️ Quantum computing “🏢 Commerce ” Proposed $100 million over three years for common stock priced 15 percent below the lowest of the May 20 or award-date close – May 2026
- SandboxAQ 🖥️ Semiconductors “🏢 Commerce ” $500 million CHIPS funding, with minority equity stake – June 2026
- I-Pulse 🖥️ Semiconductors 🏢 Commerce $250 million CHIPS funding, with minority equity stake – June 2026
- Kepler Computing 🖥️ Semiconductors 🏢 Commerce Proposed up to $245 million in CHIPS funding, with minority equity stake – July 2026
- Multibeam Corporation 🖥️ Semiconductors 🏢 Commerce Proposed up to $140 million in CHIPS funding, with minority equity stake – July 2026
- Extropic 🖥️ Semiconductors 🏢 Commerce Proposed up to $75 million in CHIPS funding, with minority equity stake – July 2026
- Thintronics 🖥️ Semiconductors 🏢 Commerce Proposed up to $50 million in CHIPS funding, with minority equity stake – July 2026
- OBSIDIA Semiconductors 🖥️ Semiconductors 🏢 Commerce Proposed up to $34 million in CHIPS funding, with minority equity stake – July 2026
- Aeluma 🖥️ Semiconductors 🏢 Commerce Proposed up to $30 million in CHIPS funding, with minority equity stake equal to the award amount. – July 2026
Notes
- The points exclude Development Finance Corporation (DFC) transactions because Congress expressly authorized DFC to make minority equity investments in the 2018 BUILD Act, years before the second Trump administration.
- The U.S. Steel golden share is included because it grants the federal government firm-specific veto rights despite carrying no conventional economic interest.
Four Key Issues
- The federal government is now acting as regulator, customer, financier, and shareholder. Decisions involving contracts, trade restrictions, permits, and additional subsidies can affect the value of its holdings.
- Competitors have reason to question whether the playing field is level.
- Calling the stakes “minority” and “noncontrolling” does not eliminate the conflicts. Public announcements often reveal little about valuations, shareholder rights, oversight, or exit plans.
- Future administrations will inherit the same tool and can use it to assemble portfolios reflecting their own political priorities.
Corporatist Industrial Policy
This is state capitalism / corporatist industrial policy. Calling it communism overstates the case.
However, and unfortunately, it’s more government economic intervention into the markets.
The irony Cato highlights is real: a Republican administration is normalizing tools that expand the state’s direct financial interest in private firms with risks to taxpayers.
That’s on top of government favoritism creating a very unwelcome shift towards government favoritism picking winners and losers.
MAGA cheers.
Socialism for the rich, the peons get austerity and lecures on living within one’s means.
Calling this state capitalism puts lipstick on these newfangled corporate pigs. The principal-agent problems created by having the state as a shareholder are not that different from moving to straight nationalization and, and one step further, to communism.
This Socialism.
Nationalist socialism? What’s another name for that?
State capitalism seems to run better than this “capitalism” if China is any model.
This is certainly an alarming innovation. But at least a stake in a company can be sold. Keeping a separate corporate structure means that the incentive to be competitive is not eliminated, as it was in government-owned enterprises in earlier times.
From a libertarian point of view, as I see it, the whole idea of modern corporations is illegitimate. A financial corporation has no actual existence: it is a creation of government. It buys and sells, hires and fires, but it doesn’t actually exist, except perhaps as an internal system of government, like the biological systems in the living body that I learned about in high school physiology.
Individual humans are to government like cells to a body, bees to a hive, or ants to a nest: as individuals, they are totally expendable.
This is not an innovation. Government ownership of companies has been around forever.
Adam Smith back in the 1700’s repeatedly pointed out that government decision-making can be distorted by favoritism, patronage, and non-economic goals, and he implied that officials don’t have the same “competitive pressure” that private managers face.
So, the question is…”Should I buy stock of the aforementioned companies?”
Rather, “short the stock of the aforementioned companies.”
Meanwhile, from the horse’s mouth: “WATCH OUT!!! LEFTIST DEMOCRATIC SOCIALIST COMMUNIST MARXISTS ARE COMING RIGHT AT US!!! WE HAVE TO VOTE RED OR BE DEAD!!!!!!!!!!!!!!”
The difference, for those of you who care, is that Trump is apparently a textbook Marxist-Leninist, not a democratic socialist. Don’t get the two confused or El Presidente will be upset.
Socialism for Wall St. is capitalism. Welfare for we the people is socialism.
MAGA
Socialism in America is when the government does what it was elected to do and functions on a basic level. Capitalism post Reagan is when you rob people and loot as much as you can before the building you just set on fire (which happens to be your home) collapses on top of you.
The East India Company was an English, and later British, joint-stock company that was founded in 1600 and dissolved in 1874. Guns and butter: ie trade.
And they swear they aren’t fascists.
Can this even get undone or are we just a new normal of fascist “democracy”?
Everything within the state, nothing outside of the state…What a state we’re in, huh?
Facism at its best
Big agree, Facism is best 👍👍
It’s so great that it’s losing yet another stupid war it started, cratering it’s own economy, protecting pedophiles again, and this time the insane zionists are in on the fascism too! How could it get any better?