Seven companies working on next-generation chip and artificial intelligence technology have agreed to hand the federal government minority equity stakes in exchange for a combined $874 million in funding, with GlobalFoundries claiming the largest share at up to $300 million. The Commerce Department's CHIPS Research and Development Office signed letters of intent with the seven firms to accelerate work on compute architectures, memory systems, and photonics for artificial intelligence hardware.
The announcement, first detailed by the National Institute of Standards and Technology on July 29, marks the latest expansion of a funding model that trades traditional research grants for ownership stakes. GlobalFoundries will receive its $300 million to speed up domestic development of co-packaged optics, a technology that integrates photonics — chip components that use light instead of electricity to move data — directly alongside AI processors, cutting two to three years off the expected R&D timeline, according to NIST. Kepler Computing is set to receive up to $245 million for 3D ferroelectric AI memory technology, while Multibeam Corporation will get up to $140 million for multi-electron-beam lithography and advanced chip packaging, NIST reported.
The remaining four companies — Extropic, Thintronics, OBSIDIA Semiconductors, and Aeluma — will split awards ranging from $30 million to $75 million each, covering thermodynamic computing, low-loss dielectric materials, anti-counterfeiting hardware security, and optoelectronic substrates, as reported by Benzinga. All seven deals give the Commerce Department a minority, non-controlling equity stake in each recipient, a structure the department has said is intended to enhance returns for U.S. taxpayers, according to Sam Liccardo, who shared coverage of the deal from The Hill.
A Formal Shift From Grants to Government Stock
The equity arrangement is not improvised. NIST amended its Broad Agency Announcement on April 20 to create what it calls the “Investment Fund Path,” a formal mechanism letting the CHIPS Research and Development Office acquire equity, warrants, or revenue shares in private firms rather than issuing traditional non-dilutive research grants. The CHIPS Act authorized so-called “other transactions” for the agency, but never explicitly spelled out equity purchases as an option, per NIST's own documentation.
That distinction matters because it marks a deliberate break from how the law was first implemented. Moneywise reported that the Biden administration distributed CHIPS and Science Act funds strictly through non-dilutive grants and cooperative agreements without ever acquiring equity, meaning the current equity-for-funding approach is a policy shift introduced under the Trump administration. The 2022 law itself, signed by then-President Joe Biden, was designed to provide federal subsidies to domestic semiconductor manufacturers to boost U.S. production.
GlobalFoundries Becomes a Repeat Equity Partner
GlobalFoundries is now the only private company to secure two separate Commerce Department equity awards under the CHIPS R&D program. The chipmaker, which operates major fabs in Vermont and New York, previously surrendered roughly 1% equity in May in exchange for a $375 million quantum foundry award before winning its new $300 million optics award in July, according to the Cato Institute. That May package was part of a larger $2.013 billion commitment across nine quantum computing companies, including $1 billion for IBM subsidiary Anderon, that NIST announced in exchange for minority equity stakes — Washington's first major foray into public-sector venture capital for quantum fabs.
Commerce Secretary Howard Lutnick has said the strategic investments will enhance domestic capabilities, create high-paying jobs, and keep America at the forefront of the semiconductor industry. Between December 2025 and July 2026, the CHIPS R&D Office announced 19 company awards totaling up to $3.8 billion across 18 private firms, with every single agreement publicly tied to a government equity stake, per Cato's tally — turning what was once a case-by-case exception into standard operating procedure.
The Intel Precedent Looms Large
This funding model traces back to the government's biggest and most controversial equity grab yet: Intel. In August 2025, the federal government converted $5.7 billion in unpaid CHIPS Act grants and $3.2 billion in defense funds into a 9.9% non-voting common equity stake in the chipmaker worth $8.9 billion at the time, as Hoodline previously reported. The deal, driven by then-President Trump's announcement that the government would take roughly a 10% stake in Intel in exchange for about $11 billion in federal subsidies, gave Washington 433.3 million shares at $20.47 apiece without any board representation.
The Intel deal drew pushback even from within Trump's own party. Senator Todd Young said the CHIPS and Science Act was never intended to let the federal government take a major stake in Intel or any other major company, and the broader practice of government equity stakes drew criticism from Trump's Republican base. The administration has since applied the same model elsewhere, including a move in December 2025 to take a $150 million stake in laser-technology firm Xlight in exchange for federal incentives.
A Widening Federal Portfolio
The scope now extends well beyond semiconductors. Fast Company reported that federal agencies under the Trump administration have acquired or proposed minority equity stakes in 30 private companies spanning semiconductors, quantum computing, rare earth mining, and defense technology, effectively positioning Washington as a public-sector venture capital investor seeking upside for taxpayers. Critics and analysts cited by Fast Company question whether the approach amounts to coherent industrial strategy or simply government-run venture capital.
Unresolved legal questions hang over the entire program. The Cato Institute noted that key tensions remain over whether the CHIPS Act actually permits direct stock acquisition without explicit congressional authorization, and whether the government holding equity positions creates conflicts of interest for agencies that simultaneously act as regulators, customers, and now corporate shareholders in the same companies they oversee.
