The U.S. government has decided that simply funding the chip industry is not enough. Now it is preparing to take equity stakes in companies like Intel (INTC) as part of the $52.7 billion CHIPS Act. This means Washington would not just be handing out subsidies; it would actually own part of the companies.
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Officials are also looking at similar stake deals with Micron (MU), TSMC (TSM), and Samsung (SSNLF). The idea is to secure America’s role in the most important technology of the future. This kind of move is almost unheard of in modern U.S. policy, where the government usually avoids direct ownership.
White House Collects Revenue from Chip Sales
The strategy does not stop at ownership. The White House has also struck revenue-sharing deals with Nvidia (NVDA) and AMD (AMD). These agreements would give the government 15% of revenue from advanced chip sales to China. That turns access to China’s market into a bargaining chip of its own.
This kind of arrangement is meant to balance two goals: keeping U.S. companies competitive while also keeping national security at the center of trade policy.
Pentagon Invests in Rare Earth Supply
Chips are not the only focus. The Pentagon is set to become the biggest shareholder in MP Materials (MP), a key rare earth mining company. Rare earths are critical for making chips and military hardware. By investing directly, the Pentagon is trying to make sure the U.S. supply chain cannot be cut off in a crisis.
Markets welcomed the news at first. Intel’s stock jumped to a six-month high after the announcement, helped by a $2 billion investment from SoftBank (SFTBY). But the excitement faded quickly. Broader tech markets fell, and investors grew nervous that government stakes could dilute shareholders and reshape competition.
Experts Warn of Big Shift
Analysts say this is about more than just one industry. Saxo Bank strategist Jacob Falkencrone noted that what started as emergency support during the pandemic is now turning into long-term government ownership. Even Senator Bernie Sanders backed the idea, saying taxpayers should get a fair return on these massive investments.
You see, Washington is setting a precedent. If it is willing to own part of Intel, there may be other companies on the list too. For investors, it means the free-market rules are changing.
The U.S. government is not just acting as a regulator anymore; it is also stepping in as an investor. And the thing is, that shift could affect how money moves, how companies compete, and how America protects its technology edge.
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