U.S. Examines Equity Ownership Model for CHIPS Act Funding

The Trump administration is exploring a new approach to semiconductor funding that could fundamentally change how the government supports chipmakers. Officials are now weighing whether the U.S. should seek an equity stake for giving grants under the CHIPS Act, Reuters reported. The goal is to strengthen domestic semiconductor production and make sure taxpayers get a return on public investments.

Government Ownership Strategy

The proposal would convert CHIPS Act grants into equity positions, and the U.S. government is discussing equity stakes in several chipmakers. The Trump administration has recently struck several unconventional deals with U.S. companies. One of them allowed AI chip giant Nvidia to sell its H20 chips to China in exchange for the U.S. government receiving 15% of the sales. In another case, the Pentagon is set to become the largest shareholder in a small mining company to help increase the production of rare earth magnets.

This represents a significant shift from the traditional grant-based approach, where companies receive funding without giving up ownership stakes. The new strategy would see the government taking a stake in chip-making companies that receive substantial federal funding, creating a direct financial interest in their success.

Intel as the Primary Target

This US equity stake in Intel would give the government significant influence over the company’s strategic direction without the voting rights. Two sources told Reuters that Treasury Secretary Scott Bessent is also involved in the CHIPS Act talks, but Howard Lutnick is leading the effort. The Commerce Department manages the $52.7 billion in CHIPS Act funding. This US equity stake in Intel for the Chips Act arrangement would give the government significant influence over the company’s strategic direction. In November 2024, it was reported that the U.S. government reduced Intel’s federal chips funding from $8.5 billion to under $8 billion.

U.S. Commerce Secretary Howard Lutnick is considering taking equity stakes in Intel and other chip companies in exchange for grants under the CHIPS Act, which was designed to boost factory construction across the country. Lutnick has been actively pushing the equity stake idea, and Trump supports it. White House Press Secretary Karoline Leavitt confirmed that Lutnick is working on a deal with Intel for the government to take a 10% stake.

Broader Industry Impact

The equity stake approach isn’t limited to Intel. According to Reuters, officials are also exploring whether similar arrangements could be applied to other chipmakers that have received or will receive CHIPS Act funding. This could affect major companies like TSMC, Samsung, and Micron that have already been allocated billions in grants.

The equity stake proposal has generated mixed reactions from the semiconductor industry. While some companies may welcome the funding, others are concerned about government involvement in their operations and strategic decisions. The arrangement could also raise questions about fair competition and market dynamics.

As discussions continue, the equity stake approach could become the new standard for major CHIPS Act funding. This would represent a significant evolution in how the US government supports strategic industries, moving from traditional grants to direct ownership positions that align public and private interests in rebuilding American semiconductor manufacturing capabilities.