Introduction
Something unusual is happening in Washington. The U.S. government, which usually hands out grants and subsidies to support industries, has quietly become a part-owner of some of the country's most important technology companies.
Over the past year, the federal government has taken equity stakes in 31 companies across semiconductors, quantum computing, steel, nuclear energy, and rare earth minerals . The portfolio is worth nearly $27 billion . And it's growing.
The most prominent example is Intel. The government's roughly 10% stake—acquired for $8.9 billion—is now worth over $40 billion . But the Intel deal was just the beginning. In May 2026, the administration announced $2 billion in quantum computing investments, all with equity stakes attached . In July, seven more semiconductor companies joined the portfolio .
And now OpenAI has reportedly proposed giving the government a 5% stake in the company .
What's driving this shift? The CHIPS and Science Act was originally designed to hand out grants. But the Trump administration has turned it into something else: a "government as investor" model where taxpayers get equity in exchange for federal funding .
Supporters say it protects taxpayer money and shares the upside. Critics worry about government interference, crony capitalism, and the erosion of free market principles . A CNBC poll found that 49% of voters consider it inappropriate for the government to own pieces of U.S. companies .
Here's what's actually happening, why it matters, and where this experiment is headed.
The Intel Deal: How the Government Became a Major Shareholder
The shift started in August 2025, when Intel agreed to give the U.S. government a roughly 10% stake in the company in exchange for $8.9 billion in federal subsidies .
Under the agreement, the government received about 433 million shares of common stock at roughly $20.47 each . The deal was funded partially by CHIPS Act grants and partially by a separate Defense Department program focused on secure chip manufacturing .
But here's the important detail: This wasn't planned. The Biden-era CHIPS Act was designed to hand out grants with strings attached—project labor agreements, restrictions on stock buybacks, and commitments to invest $100 billion of private capital . The Trump administration opposed those conditions and converted the remaining grants into equity instead .
The government's stake is passive. Intel emphasized that the government gets "no board representation or other governance or information rights" . But the administration sees it differently. President Trump described it as a "partnership with the American public" .
Has it been a good deal for taxpayers? On paper, yes. The Intel shares the government acquired for $8.9 billion have surged by over 370% and are now worth about $42 billion . That's a paper profit of more than $30 billion—one of the best returns the government has ever seen on an industrial investment.
But there are questions about how much of that gain is real vs. political. The libertarian Cato Institute has argued that a "good chunk" of Intel's inflated share price reflects a "political premium" rather than genuine business performance . The company's foundry business is still losing money, and when Trump announced an Apple-Intel partnership that wasn't finalized, Intel's market cap jumped by tens of billions in a single day .
The Portfolio Expands: From Intel to 31 Companies
The Intel deal set a template that the administration has applied across multiple industries.
Quantum Computing: A $2 Billion Bet
In May 2026, the Commerce Department announced $2.013 billion in CHIPS Act funding for quantum computing companies—again with equity stakes attached .
The biggest piece went to IBM, which is establishing a standalone quantum chip foundry called Anderon in Albany, New York. IBM will receive $1 billion in CHIPS incentives and is providing an additional $1 billion in cash . The goal: deliver the world's first large-scale, fault-tolerant quantum computer by 2029 .
Other quantum investments included GlobalFoundries ($375 million), Atom Computing ($100 million), D-Wave ($100 million), Infleqtion ($100 million), PsiQuantum ($100 million), Quantinuum ($100 million), and Rigetti ($100 million) .
Semiconductor R&D: Seven More Stakes
On July 29, 2026, the Commerce Department signed letters of intent with seven companies for $874 million in semiconductor research funding, with minority equity stakes attached :
- GlobalFoundries – Up to $300 million for co-packaged optics (using light instead of electricity to move data between chips)
- Kepler Computing – Up to $245 million for ferroelectric memory
- Multibeam Corporation – Up to $140 million for advanced packaging
- Extropic – $75 million for thermodynamic computing
- Thintronics – $50 million for ultra-low-loss dielectric materials
- OBSIDIA Semiconductors – $34 million for counterfeit detection technology
- Aeluma – $30 million for substrate technology for photodetectors and lasers
Critical Minerals and Other Industries
The portfolio extends beyond chips. The government has stakes in MP Materials (rare earth minerals), Vulcan Elements, USA Rare Earth, Westinghouse (nuclear energy), and a "golden share" in U.S. Steel . The Pentagon's Office of Strategic Capital, with up to $200 billion in lending capacity, is run by a former Cerberus executive whose old firm invests in the same industries .
And OpenAI has reportedly proposed giving the government a 5% stake worth roughly $42.6 billion . CEO Sam Altman has suggested a broader structure where Washington holds minority stakes in leading AI developers through a government vehicle .
The New Strategy: A Framework for the Investment Model
The equity model is part of a broader shift in how the U.S. government thinks about technology. In August 2026, the White House released the National Security Science and Technology Strategy (NSSTS) —the first document of its kind since 1995 .
The 24-page strategy organizes the U.S. approach around four priorities :
- Focused – Directing technology competition toward areas where the U.S. has advantages
- Resilient – Reducing vulnerabilities in critical supply chains
- Agile – Accelerating innovation by removing regulatory hurdles
- Secure – Preventing foreign exploitation of U.S. intellectual property
What’s at the Top of the List
The strategy establishes a clear hierarchy. At the very top are three areas where the U.S. needs "clear technological superiority" :
- Undersea superiority – submarines and anti-submarine warfare
- Space – from low Earth orbit to the area around the Moon
- Artificial intelligence and autonomy – where the strategy calls for "competitive advantage" rather than decisive superiority
Supporting these are "other critical areas": airpower (stealth, electronic warfare, and air defense), long-range strike, and C5ISR (command, control, communications, computers, cyber, intelligence, surveillance, and reconnaissance) .
And below those are the "key enabling technologies": advanced manufacturing, hypersonics, nuclear energy, and semiconductors .
A Shift on Talent
One notable change: The strategy says the U.S. "will further strengthen its workforce by attracting and retaining top-tier global talent in critical national security S&T fields" . This is a departure from the previous National Security Strategy, which suggested that global talent "undercuts American workers."
The Debate: Is Government Ownership a Good Thing?
The Case for Government Investment
Supporters point to the returns. The Intel stake alone has generated tens of billions in paper profits. Commerce Secretary Howard Lutnick has framed these as "strategic investments" that will "enhance our country's domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry" .
The industrial logic also makes sense. The CHIPS Act was designed to reverse decades of offshoring. In the 1990s, the U.S. produced roughly 37% of the world's chips. That figure had dropped to about 12% before the legislation passed . Taking equity instead of handing out grants gives the government a direct financial interest in recipients' stock prices. If companies succeed, taxpayers share the upside.
There's also a strategic argument. As one analysis noted, the government hopes to "more directly nudge corporate strategy into alignment with national strategic imperatives" .
The Case for Concern
Critics, particularly from the libertarian Cato Institute, worry about a different set of outcomes.
Government Interference: "The new investment thesis is less about choosing between hardware and software than about owning the intersection of both," the Cato Institute has argued. Government stakes have already been used to pressure companies—reportedly pushing Apple to manufacture chips using Intel's factories, and using its "golden share" of U.S. Steel to prevent plant shutdowns .
Crony Capitalism: The Pentagon's Office of Strategic Capital is run by a former Cerberus executive whose old firm invests in the same industries . One beneficiary, Vulcan Elements, is backed by Donald Trump Jr.'s venture capital firm . Commerce Secretary Lutnick's former investment firm is connected to USA Rare Earth, which is now partially state-owned .
Unseen Costs: Speculators are investing billions based on "perceived political momentum, rather than the companies' actual performance or promise" . The Cato analysis estimated that if Intel's share price had followed the broader semiconductor industry over the past year, its market cap would have been $268 billion less than it is now .
The Exit Problem: Governments are notoriously bad at exiting investments. As one analysis noted, "Governments acquire ownership quickly, under conditions of genuine urgency, and find it far harder to divest" . Senator Jon Husted is introducing legislation that would limit government stakes to eight years .
What the Public Thinks
The public is skeptical. According to a CNBC poll, 49% of U.S. voters consider it inappropriate for the government to own pieces of U.S. companies. Only 19% thought it was acceptable .
What Comes Next
The direction is clear: the U.S. government is becoming an investor in American technology. The White House strategy provides the framework. The CHIPS Act's investments target specific technical bottlenecks. Congress is moving on quantum technology. And OpenAI's proposal suggests the AI industry is the next frontier.
The question is whether this model can be sustained without distorting markets, creating conflicts of interest, or undermining public trust. History suggests that anything framed as temporary should carry an escape clause—and that exit mechanisms should be designed before the investment is made .
For now, the experiment continues. And the federal government's portfolio keeps growing.
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