The Department of Commerce announced this week it will distribute $874 million in federal funding to seven semiconductor companies and receive a minority ownership stake in each in return, reviving a practice that has drawn pushback from within the Republican Party.
The National Institute of Standards and Technology disclosed the arrangements Wednesday in a blog post, saying Commerce’s CHIPS Research and Development Office had signed letters of intent with the seven firms under the CHIPS and Science Act.
The largest award, up to $300 million, will go to GlobalFoundries, a semiconductor manufacturer. Kepler, a company developing AI memory and logic technologies, will receive up to $245 million. Multibeam Corp. will get up to $140 million for semiconductor equipment manufacturing. The remaining funds are split among four smaller firms: Extropic, Thintronics, Obsidia Semiconductors, and Aeluma Inc.
“The Department will receive a minority, non-controlling equity stake in each company as a condition for receiving the funds to enhance the return for the U.S. taxpayer,” NIST wrote in its announcement.
Commerce Secretary Howard Lutnick defended the deals in a press release. “These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry,” Lutnick wrote.
The announcement follows a pattern the Trump administration established last year. In the summer of 2025, President Trump announced the federal government would take a 10 percent stake in Intel in connection with roughly $11 billion in CHIPS Act subsidies the company had received under former President Biden.
That arrangement drew criticism from Sen. Todd Young (R-IN), who helped write the original CHIPS and Science Act. Young said at the time the law was never intended to give the federal government a controlling or major stake in any private company. The Trump administration went on to take a $150 million stake in xLight, a laser technology startup, in December 2025.
The CHIPS and Science Act was signed by Biden in 2022 with bipartisan support, intended to boost domestic semiconductor production and reduce U.S. dependence on foreign chip manufacturers, particularly those based in Asia.
The latest round of equity deals, announced quietly with no press conference, covers companies involved in advanced integrated photonics, AI computing architectures, and semiconductor equipment. Integrated photonics is an emerging microchip technology that uses light instead of electricity to transfer and process data.
Critics of the arrangement argue that the federal government taking equity positions in private companies blurs the line between public subsidy and government ownership, raising questions about long-term entanglement between federal agencies and the firms they fund.
