The Department of Commerce said on July 29 it will allocate $874 million in incentives to bolster U.S. chip manufacturing, linking the funding to equity stakes in seven companies.
The National Institute of Standards and Technology (NIST) said the Commerce Department’s CHIPS Research and Development Office signed letters of intent with the tech firms as part of the Biden administration’s 2022 CHIPS and Science Act.
According to a NIST blog post, the funds will be directed toward research and development on several vital technologies, including integrated photonics. These are microchips that move and process data using light rather than electricity.
The federal incentives will also support work on new computing architectures and memory systems designed for high‑performance and AI workloads.
This is all part of the administration’s initiative of returning chip manufacturing to the United States, Commerce Secretary Howard Lutnick said in a statement.
“With today’s compute supply chain investments, the Trump Administration is accelerating America’s innovation engine,” Lutnick said.
“These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs, and keep America at the forefront of the semiconductor industry.”
Two firms will receive more than half of the funding: semiconductor manufacturer GlobalFoundries (up to $300 million) and AI memory firm Kepler (up to $245 million).
The remaining funds will be sent to Multibeam Corp, Extropic, Thintronics, OBSIDIA Semiconductors, and Aeluma.
It has been about four years since President Joe Biden signed the landmark bill. The legislation provides federal support to domestic semiconductor manufacturers to bolster domestic semiconductor production.
Shortly after his return to the White House for a second term, President Donald Trump urged Congress to scrap the legislation, which received bipartisan pushback from lawmakers.
“Your CHIPS Act is a horrible, horrible thing. We give hundreds of billions of dollars, and it doesn’t mean a thing. They take our money, and they don’t spend it,” Trump said in a speech to a joint session of Congress in March 2025. “You should get rid of the CHIPS Act and whatever is left over, Mr. Speaker, you should use it to reduce debt.”
Rather than handing out subsidies to companies without receiving anything in return, the president has said the government should instead be given small stakes in these firms.
Building Equity Stakes
Over the past year, the current administration has acquired or proposed purchasing minority stakes in scores of firms centered on critical minerals, quantum computing, and semiconductor manufacturing.
New research from the Cato Institute determined that the administration has announced equity stakes in 30 companies. Additionally, the CHIPS Research and Development Office has announced 19 final or proposed company awards totaling up to almost $4 billion, the policy group found.
The latest string of deals indicates that government ownership of companies is becoming increasingly common, said Tad DeHaven, policy analyst at the Cato Institute.
“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,” DeHaven said in a post for the Institute.
“What is remarkable is that federal corporate ownership is becoming routine under a Republican administration, while a Republican-controlled Congress is not just letting it happen but may even enshrine the practice in statute.”
A provision in the Senate’s Fiscal Year 2027 National Defense Authorization Act establishes a Defense Equity Investment Account. It is a Treasury fund that allows the Pentagon to buy minority equity stakes in private businesses focused on critical minerals, materials, chemicals, and batteries.
A recent CNBC All-America Economic Survey found that only 19 percent of U.S. voters agree the federal government should own a portion of U.S.-based companies. Forty-nine percent disapprove, and 32 percent were undecided.
Trump also signed an executive order in February that establishes a plan to create a sovereign wealth fund, similar to those in Norway, China, and Gulf countries.
