The U.S. government plans to invest $1.6 billion in USA Rare Earth, a private miner based in Oklahoma, according to a Financial Times report. In return, the government would receive about 10% of the company through shares and warrants priced at $17.17. In addition, the company is set to announce a separate $1 billion private funding round. The White House and USA Rare Earth did not comment on the report.
Claim 50% Off TipRanks Premium
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Stay ahead of the market with the latest news and analysis and maximize your portfolio's potential
According to the report, the deal is aimed at “onshoring critical and strategic minerals essential to the semiconductor supply chain and U.S. national security.”
Notably, the investment is tied to the Commerce Department CHIPS office, which supports domestic chip and equipment projects. As a result, rare earth minerals are now being treated as part of the same supply chain as chips and AI hardware.
USA Rare Earth is developing a mine in Texas and a magnet plant in Oklahoma, with commercial output expected to begin in the first half of 2026. The company has a market value of about $3.45 billion and focuses on neodymium magnets used in EVs, defense gear, and data centers.
Market impact and public companies to watch
This move follows similar government stakes taken last year in MP Materials Inc (MP), Lithium Americas Corp (LAC), and Trilogy Metals Inc (TMQ). Together, these deals show a steady policy shift toward direct support for U.S. mineral supply.
For investors, this trend could benefit firms tied to EVs, AI, and chip tools.
Tesla (TSLA) relies on rare-earth magnets for its motors, while Nvidia (NVDA) depends on secure chip supply for its AI systems. Likewise, Advanced Micro Devices Inc (AMD) and Intel (INTC) could gain from a more stable domestic supply chain.
Meanwhile, the government’s role may reduce funding risk for miners and speed up project timelines. However, it may also raise closer oversight and tighter rules over time.
Overall, the deal signals that critical minerals are becoming a long-term focus for U.S. industrial policy and market planning.
Using TipRanks’ Comparison Tool, we’ve assembled all the tickers mentioned in the piece to gain an in-depth view of each stock and the broader energy and EV industries.
