Introduction

Something unusual is happening in Washington. The U.S. government, which normally 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 direct equity stakes in 31 companies across semiconductors, quantum computing, steel, nuclear energy, and rare earth minerals . The portfolio is valued at roughly $27 billion . And it’s still growing.

The most visible example is Intel. The government’s roughly 10% stake—acquired for $8.9 billion—surged to about $44 billion as of July 2026 . That’s a paper profit of over $35 billion—one of the best returns the government has ever seen on an industrial investment.

But the Intel deal was just the beginning. In May 2026, the Commerce Department announced $2 billion in quantum computing investments, all with equity stakes attached . In July, seven more semiconductor companies joined the portfolio. And OpenAI has reportedly proposed giving the government a 5% stake worth roughly $42.6 billion .

What’s driving this shift? The CHIPS and Science Act of 2022 was originally designed to hand out grants to semiconductor manufacturers. But the Trump administration opposed the program’s conditions—including labor agreements, restrictions on stock buybacks, and investment commitments—and converted the remaining grants into equity instead .

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 and what it means for American technology.

The Strategy Behind the Shift

The equity model didn’t emerge from nowhere. It’s 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 strategy organizes the U.S. approach around four pillars: Focused, Resilient, Agile, and Secure .

“Focused” means directing technology competition toward areas where the U.S. has structural advantages—undersea, space, and AI and autonomy . The strategy calls for “clear technological superiority” in the undersea and space domains, and “competitive advantage” in AI and autonomy, reflecting how fast the AI race is moving .

“Resilient” means reducing vulnerabilities in critical supply chains—the same logic behind the CHIPS Act and the rare earth investments .

“Agile” means accelerating innovation by removing regulatory hurdles and reforming defense acquisition processes to shorten development cycles .

“Secure” means preventing foreign exploitation of U.S. intellectual property, particularly by China .

Notably, the strategy also calls for strengthening the workforce by “attracting and retaining top-tier global talent”—a departure from the previous National Security Strategy, which suggested that global talent “undercuts American workers” .

The Intel Deal: How the Government Became a 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 by $5.7 billion in unpaid CHIPS Act grants and $3.2 billion from the Defense Department’s Secure Enclave program for military chip manufacturing .

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 a commitment by Intel to invest $100 billion of its own capital. The Trump administration opposed those conditions and converted the remaining grants into equity instead, stripping the original requirements .

The government’s stake is passive—no board seat, no voting rights . But President Trump framed it differently, announcing: “The United States of America now fully owns and controls 10% of INTEL.”

Has it been a good deal for taxpayers? On paper, yes. The Intel shares the government acquired for $8.9 billion surged to roughly $44 billion by July 2026 . That’s a paper profit of more than $35 billion—one of the best returns the government has ever seen on an industrial investment.

But critics question how much of that gain reflects political momentum rather than genuine business performance . According to a Cato Institute analysis, if Intel’s share price had followed the growth rate of the broader semiconductor industry, its market cap would have been $268 billion less than it is now . The company’s foundry business is still losing money, and Trump’s announcement of a still-unconfirmed Apple-Intel deal alone inflated Intel’s market cap by tens of billions in a single day .

The government also faces restrictions on when it can sell its shares. And if the stock price falls, so does the paper profit.

The Portfolio Expands

The Intel deal set a template that the administration has applied across multiple industries.

July 2026: Seven Semiconductor Companies

On July 29, 2026, the Commerce Department signed letters of intent with seven companies for $874 million in semiconductor research funding, with equity stakes attached .

GlobalFoundries – Up to $300 million for co-packaged optics. Using light instead of electricity to move data between chips. The Commerce Department believes this could advance U.S. leadership in AI infrastructure by two to three years . GlobalFoundries had already received $375 million in May for quantum-related work.

Kepler Computing – Up to $245 million for ferroelectric memory. A new type of AI memory that allows operations to happen directly on the memory chip, helping solve the “memory wall” problem that slows down AI systems .

Multibeam Corporation – Up to $140 million for advanced packaging. Technology that assembles and stacks multiple chips with thousands of connections—crucial for next-generation chip designs .

Extropic – $75 million for thermodynamic computing. Using natural thermal fluctuations to solve complex problems with less energy.

Thintronics – $50 million for ultra-low-loss dielectric materials. For next-generation interconnects that reduce signal loss .

OBSIDIA Semiconductors – $34 million for counterfeit detection technology. To secure AI supply chains .

Aeluma – $30 million for substrate technology. For photodetectors and lasers used in AI optical interconnects .

Commerce Secretary Howard Lutnick 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” .

May 2026: Quantum Computing

In May 2026, the administration 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) .

Like a venture capital firm building a diversified portfolio, the government is spreading bets across every major quantum modality—superconducting, photonic, trapped ion, neutral atom, and silicon spin.

Beyond Semiconductors

The portfolio extends well 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 that gives the government veto power over certain business decisions .

In July 2025, the Pentagon acquired $400 million in shares of MP Materials, becoming its principal shareholder with about 15% of the company, to secure American rare earth supply against Chinese dominance .

The Debate: Is Government Ownership a Good Thing?

The Case For It

Financial returns. The Intel stake alone has generated tens of billions in paper profits. Commerce Secretary Lutnick has called these “strategic investments” that let taxpayers “share in the upside” .

National security. The stakes ensure access to critical technologies and materials. Taking equity “more directly nudges corporate strategy into alignment with national strategic imperatives” . The government can influence companies without passing new laws.

Industrial strategy. 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 had dropped to about 12% before the legislation passed . Taking equity instead of handing out grants gives the government a direct financial interest in the outcome.

The Case Against It

Government interference. The libertarian Cato Institute has been the most vocal critic. The administration’s policy is “a deliberate attempt to shape corporate behavior and obtain leverage under the guise of bolstering domestic capacity” . Government stakes have already been used to pressure companies—reportedly pushing Apple to manufacture chips using Intel’s factories, and using the “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. Commerce Secretary Lutnick’s former investment firm is connected to USA Rare Earth, which is now partially state-owned . Critics argue the practice “may distort competition, stifle innovation, and potentially lead to monopolies or market dominance.”

The exit problem. Governments are notoriously bad at exiting investments. “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. 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 portfolio of 31 companies is growing, and the administration shows no sign of slowing down.

But the deeper questions aren’t about returns. They’re about what happens when the government becomes a shareholder, regulator, and customer all at once. Does this model accelerate innovation or distort markets? Does it strengthen American technology leadership or create new risks?

History suggests that anything framed as temporary should carry an escape clause—and that exit mechanisms should be designed before the investment is made . As one analysis put it, “Temporary exceptions accumulate into permanent practice not through any single dramatic decision, but through the compounding difficulty of ever choosing to stop” .

For now, the experiment continues. And the federal government’s portfolio keeps growing.