Key facts
- The Trump administration is converting federal grants into equity stakes in companies to secure supply chains for critical minerals and semiconductors.
- The U.S. Commerce Department awarded $500 million to SandboxAQ for chipmaking materials in exchange for a minority stake.
- Investments are being made in quantum computing companies like IBM, GlobalFoundries, D-Wave, and others.
- The U.S. is taking stakes in rare earth and lithium projects, including USA Rare Earth, Critical Metals, Lithium Americas, and MP Materials.
- The U.S. Department of Defense will become the largest shareholder in MP Materials with a 15% stake.
- Intel Corp is receiving a 9.9% stake as part of an investment to bolster domestic manufacturing.
The Trump administration is actively working to strengthen U.S. supply chains for critical minerals and semiconductors by taking equity stakes in companies, a strategic pivot away from traditional grant-based funding. This initiative aims to reduce the nation's reliance on China, particularly in sectors deemed vital for national security and economic competitiveness.
In a significant move, the U.S. Commerce Department awarded $500 million to Nvidia-backed SandboxAQ to develop new materials for chipmaking. In return, the government will receive a minority stake in the company, though without voting rights or a board seat. The department stands to gain royalty payments if SandboxAQ successfully develops and licenses its materials.
The administration is also channeling substantial investments into quantum computing. IBM will receive $1 billion to help launch Anderon, a dedicated quantum chip manufacturing facility, with IBM matching the investment. GlobalFoundries is set to receive $375 million to accelerate its quantum technology solutions, with the government acquiring about a 1% equity stake. Additionally, approximately $100 million each is earmarked for D-Wave, Rigetti Computing, Infleqtion, Atom Computing, PsiQuantum, and Quantinuum to address technical hurdles in quantum computer development, with the government taking minority stakes in these firms. Diraq will also receive up to $38 million for quantum-computing technology scaling, with an equity stake for the government.
In the critical minerals sector, the U.S. is taking a 10% stake in USA Rare Earth as part of a $1.6 billion investment package to establish an integrated rare earth and magnet production chain. This effort aims to bolster U.S. processing capacity and reduce dependence on China, which has recently restricted exports of key minerals.
Korea Zinc is set to build a $7.4 billion smelter in Tennessee through a joint venture. The U.S. Department of Defense will hold a 40% stake in this JV, supported by $210 million in CHIPS Act subsidies. Korea Zinc will issue new shares, giving U.S. strategic investors about 10% of the company, with the remainder financed by U.S.-backed loans. This project is seen as crucial for strengthening U.S. supply chains and lessening reliance on China.
Trilogy Metals will receive about $35.6 million for the development of critical mineral resources at its Upper Kobuk Mineral Projects in Alaska, with the White House also investing and signing an executive order to permit an access road to the mineral-rich district. Discussions are also ongoing for the administration to take an approximately 8% stake in Critical Metals for its rare earths deposit in Greenland.
In the lithium sector, Lithium Americas will grant the government a 5% stake in its parent company and 5% in its Thacker Pass JV with General Motors for its Nevada lithium mine, a key project for building a domestic battery supply chain. MP Materials, which operates the sole U.S. rare earths mine, will see the U.S. Department of Defense become its largest shareholder with about a 15% stake, signaling a high-profile investment in domestic critical minerals. Intel Corp is also set to receive a 9.9% stake as part of an investment aimed at strengthening U.S. supply chain security and supporting its domestic advanced manufacturing facilities.