Trump administration bets $30b on private firms in semiconductors, critical minerals and quantum computing

The Trump administration has been steadily acquiring stakes in companies across strategic industries — semiconductors, critical minerals and quantum computing — emerging as a large-scale equity investor. Since the start of Trump's second term, 43 deals involving equity stakes have been announced, with total investment reaching about $30 billion.

According to the Wall Street Journal, the Trump administration has recently made a series of investments in quantum computing companies and secured a 35 percent stake in a firm pursuing oil operations in Venezuela, broadening its direct investment in private enterprises. Last week, the Commerce Department announced four additional equity investment deals in the semiconductor and energy sectors.

The 43 deals include not only direct share acquisitions but also warrants — rights to convert into equity at a later date. According to the Council on Foreign Relations, the total capital deployed in these investments amounts to about $30 billion. The pace at which the government is acquiring stakes in private companies has led analysts to describe it as having transformed, in effect, into a large-scale equity investor.

The returns have been substantial. Chipmaker Intel, which sold a 9.9 percent stake to the US government in August last year, saw its share price surge, generating tens of billions of dollars in unrealized gains across the government's overall equity portfolio.

Semiconductors are widely regarded as the backbone of the global AI race. The government has announced 14 investment deals in the semiconductor sector, with the largest being an $8.9 billion investment in Intel. The market value of the government's Intel stake soared at one point to $61 billion on the back of months of share price gains, though a sharp drop in Intel's share price in recent weeks has pulled that figure back to about $41 billion.

In December last year, the government announced a preliminary agreement to invest $150 million in Xrite, a company developing laser technology used in semiconductor manufacturing. The deal, structured so that the Commerce Department secures an equity stake in exchange for government funding, was finalized in June.

Last week, the Commerce Department announced deals to provide a combined $389 million to four companies — Helion, Commonwealth Fusion Systems, Vertical Semiconductor and Sibelco — in exchange for equity stakes.

At least 16 investment deals have also been concluded in metals, critical minerals and natural resources. These companies supply raw materials essential to industries ranging from batteries to advanced defense technology. Eight of the deals involved loans. Vulcan Elements and Rielement Technologies, which produce high-purity materials used in magnet manufacturing, received loans of $620 million and $80 million, respectively, from the US Department of Defense.

Among the larger deals in this sector is a $2.15 billion investment by the Pentagon, alongside private investors, in Korea Zinc — a transaction that reflects the aligned interests of the United States and South Korea in reducing dependence on China in critical mineral supply chains. China holds dominant influence in mining and critical minerals, and concerns have consistently been raised that it could restrict access to key raw materials that both countries need. The two countries have been increasing investment in critical mineral companies to counter that supply chain threat.

The Trump administration is also investing aggressively in the still-nascent quantum computing industry. Quantum computing is seen as having the potential to fundamentally transform cybersecurity frameworks and dramatically accelerate scientific research beyond the limits of conventional computers.

Trump signed two executive orders in June aimed at accelerating quantum computer development — measures designed to strengthen the United States' digital defense capabilities and transition federal government security systems to technology capable of withstanding quantum computing attacks.

The government has announced plans to take equity stakes in nine quantum computing companies, with eight of those deals involving investments of at least $100 million each. Most of the deals have not yet been finalized. The largest is a $1 billion commitment to IBM, which plans to contribute an additional $1 billion of its own to build the United States' first quantum semiconductor manufacturing facility.

The government's approach to these investments continues to draw scrutiny. Many of the deals combine equity stakes with loans and supply contracts. Experts say the complex, deal-specific structures mean the legal authority and basis for some agreements have not been sufficiently vetted.

Some deals extend the existing model of overseas project support through the US International Development Finance Corporation. But as the administration becomes increasingly involved directly with private companies, critics who value free-market principles argue the government is overstepping into the market. Those who believe industries critical to US competitiveness — such as AI and critical minerals — require direct government cultivation, however, view the equity investments as strategic assets.

Experts say the government's corporate equity holdings need to be managed as systematically as any investment portfolio. Jonathan Hillman, a senior fellow at the Council on Foreign Relations, said the government must "continuously monitor investment performance and rebalance the portfolio when necessary to optimize returns," adding that "returns should not be measured in purely monetary terms."

Hillman also said the lack of a chief investment officer to oversee Washington's growing portfolio is a problem. "There are plenty of people pushing deals, but no one is in charge of managing the portfolio as a whole," Hillman said.