Commerce Department quietly announces 7 new equity stakes in private companies

The Department of Commerce quietly announced this week it will designate more than $870 million in federal incentives for semiconductor manufacturing in exchange for a minority equity stake in seven companies.

In a blog post Wednesday, the National Institute of Standards and Technology (NIST) said Commerce’s CHIPS Research and Development Office signed letters of intent with seven companies to provide a combined $874 million in federal funding under the landmark CHIPS and Science Act.

The financial awards will be used to conduct research and development on critical technologies and advanced integrated photonics — a microchip technology that uses light instead of electricity to transfer and process data. It will also be used for research and development on compute architectures and memory for computing and artificial intelligence systems, according to NIST.

“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.

Up to $300 million will go to GlobalFoundries, a semiconductor manufacturer, while Kepler, which is developing AI memory and logic technologies, will receive up to $245 million.

Multibeam Corp. will get up to $140 million for the company’s semiconductor equipment manufacturing, NIST said, with remaining funds going to equipment makers Extropic, Thintronics, Obsidia Semiconductors and Aeluma Inc.

“These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry,” Commerce Secretary Howard Lutnick wrote in a press release.

The announcement comes nearly a year after President Trump announced the federal government would take a 10 percent stake in Intel, one of the nation’s largest chip manufacturers, for roughly $11 billion in federal subsidies the company received.

The practice has drawn criticism from Trump’s Republican base. Sen. Todd Young (R-Ind.), who drafted the foundation of the CHIPS and Science Act, said at the time the law never intended to let the federal government take a major stake in Intel or any other major company.

The legislation, signed by then-President Biden in 2022, provides federal subsidies to domestic semiconductor manufacturers to boost domestic production in the U.S.

Despite backlash last summer, the Trump administration moved last December to take a $150 million stake in xLight, a startup developing laser technology, in exchange for federal incentives.