&x27;A portfolio approach&x27;: Trump admin announces new government stakes in 7 chip companies in exchange for equity Kit PulliamMon, August 3, 2026 at 3:00 PM UTC 0 On July 29, the Department of Commerce announced it intended to provide $874 million in federal incentives to seven AI and advanced computing companies in exchange for equity. This isn’t the first time the Trump administration announced a similar equityconnected deal. Last year, the government invested $8.9 billion in Intel.
'A portfolio approach': Trump admin announces new government stakes in 7 chip companies in exchange for equity
Kit PulliamMon, August 3, 2026 at 3:00 PM UTC
0
On July 29, the Department of Commerce announced it intended to provide $874 million in federal incentives to seven AI and advanced computing companies in exchange for equity.
This isn’t the first time the Trump administration announced a similar equity-connected deal. Last year, the government invested $8.9 billion in Intel. In May of this year, it invested a little over $2 billion in 9 quantum computing companies in what it called “a portfolio approach.”
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“The CHIPS R&D Office is taking a portfolio approach to strengthen and accelerate US leadership across multiple quantum modalities at once,” said Bill Frauenhofer, executive director of semiconductor investment and innovation at the Department of Commerce, in the Department’s press release on the deal.
The government owning equity in private companies is unusual, to say the least. And experts say that the way the Trump administration is approaching equity could be easy to abuse.
“The federal government has powers no private shareholder possesses,” said Tad DeHaven, policy analyst at the Cato Institute, in an email to Moneywise. “A government that owns the players cannot be trusted to call the game fairly.”
Here’s what makes government ownership stakes such a big deal — and what it could mean for you.
The government has owned equity in companies before, but not like this
While it is unusual, the U.S. government holding equity in private companies has occurred before. But there’s one big difference in past ownership deals compared to these new ones.
“It hasn’t been normal for Washington to accumulate stakes in otherwise private companies as a routine economic policy tool,” DeHaven said. He says that several administrations — including the Carter, Bush, and Obama administrations — have accumulated stakes in companies during emergencies, such as during the Great Recession or after 9/11.
“Whatever one thinks of those interventions, they were justified as emergency stabilization measures and generally intended to be unwound,” DeHaven said. “The second Trump administration is doing something quite different.”
Each of these deals has been brokered at least partially through the CHIPS and Science Act, a Biden-era bill that allows the government to fund domestic semiconductor production. During the Biden administration, CHIPS deals did not involve the government receiving equity stake in the companies they funded.
In September 2025, the Department of Commerce announced a new funding path for CHIPS called the “Investment Fund Path.”
The CHIPS R&D Office decides which path a company qualifies for, and companies who are chosen for the investment fund path “may be required to issue to the Department equity, warrants, licenses to intellectual property, royalties or revenue sharing, or other such instruments to ensure a return on investment to the Government.”
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Ensuring a return on investment makes the new path sound more like a money-making strategy than a push to promote domestic production and job growth. It also tracks with Trump’s previous calls for a sovereign wealth fund.
The White House Press Office did not immediately respond to a request for comment.
Read More: Millionaires under 43 hold only 25% of their wealth in stocks. Here’s where their money is actually going
What this chip company deal means for you
Howard Lutnick, U.S. Secretary of Commerce, says that the most recent CHIPS deal “will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of our semiconductor industry” in the Department’s release.
But what other ways could these deals impact the average consumer?
In the short term, DeHaven says it could provide protection to the company in question, along with the employees and suppliers that work there. But ultimately, regular citizens aren’t the ones who get dividends when the company’s stock goes up — the government does.
“Any return goes to the government under the applicable budget rules, while taxpayers remain exposed to losses and possible follow-on bailouts,” DeHaven said.
The government could use the ROI they get from the deal to fund programs that help Americans. But historically, the Trump administration has been more focused on cutting these programs instead.
Indirectly, DeHaven says that deals like this could “weaken market discipline, steer private capital toward politically favored firms, and place competitors and startups at a disadvantage.”
He also warns that Trump setting this precedent could lead to future administrations following his lead.
“Once Washington normalizes owning private companies, the remaining fight is over which politicians get to use that power and for what purposes,” Dehaven said.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Source: "AOL Money"
Source: Money
Published: August 3, 2026 at 11:18AM on Source: PRIME TIME
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