AsianFin -- Reports on Thursday indicated the Trump administration is weighing the way to expand its control over companies in strategic industries.
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The U.S. Department of Commerce confirmed the government is not in talks with quantum computing firms to take equity stakes in these companies in exchange for federal funding. “The Commerce Department is not currently negotiating equity stakes with quantum computing companies,” the spokesperson said in a statement.
The clarification came on the heels of a report claiming the U.S. government is considering equity investment in select quantum computing companies as part of efforts to shore up high-tech industries.
Several companies in the sector including IonQ, Rigetti Computing and D-Wave Quantum are talking to give the Commerce Department equity stakes to get federal funding earmarked for promising technology firms, other companies like Quantum Computing and Atom Computing are considering similar arrangement, the Wall Street Journal cited unnamed sources.
It was reported that the quantum computing companies are discussing funding awards from Washington of at least $10 million each, and other technology companies are also expected to vie for the funding.
The quantum computing companies have reach out to the White House, and the Trump administration is receiving lots of pitches for taking equity stakes, but such move is not necessarily what the administration is considering, Yahoo Finance learned from a person familiar with the matter.
For any government equity stake, U.S. President Donald Trump wants to get a good return, and any investment would be taken advantage of leftover funds from the Trump administration’s overhaul of the CHIPS and Science Act of 2022 (CHIPS Act) commitments following, the person noted. The CHIPS Act, signed into law by former President Joe Biden, spends nearly $53 billion to boost semiconductor manufacturing and research in the United States.
It was said that what is under the White House’s consideration could be warrants or loans, and may not necessarily be with the companies mentioned in the Wall Street Journal report.
The U.S. government has shifted from subsidies to direct stakes in Intel Corporation and some critical mineral miners earlier this year. MP Materials, America’s only integrated rare earth producer,on July 10 said the U.S. Defense Department will become its largest shareholder after it agreed to buy $400 million of its preferred stock.
U.S. President Donald Trump on August 22 announced his administration now “fully owns and controls 10% of ”Intel, a company that is “fundamental to the future of our Nation.” Intel that day confirmed it agreed to give a nearly 10% stake to the Trump administration in exchange for a total of $11.1 billion funding under the CHIPS Act .
The U.S. Department of Energy in late September agreed to take a 5% equity stake in Lithium Americas, a Canadian miner, and a separate 5% stake in its Thacker Pass mining project, the largest lithium deposit in the country. The White House last week confirmed a partnership that give the Pentagon a 10% stake in Canadian miner Trilogy Metals.
U.S. Treasury Secretary Scott Bessent in late August hinted the Trump administration is eyeing more government stakes in the private sector, expanding its deal with Intel.
When asked if the administration is considering taking stakes in further semiconductor companies, Bessent replied:”I don't think Nvidia needs financial support.” Bessent added that companies in other industries that are critical for the United States could be the government’s target.
“So, you know, that that seems, not on the table right now, but could there be other industries, where you know, that we're reshaping, something like shipbuilding, that.Sure. There could be things like that. And these are critical industries that we have to, we have to be self-sufficient in the United States,” said Bessent.
Bessent last week said "I wouldn’t be surprised" when asked about additional government equity stakes, which are deemed as part of efforts to strengthen U.S. supply chain in the face of China’s new rare earth export controls.
More stakes are possible for sectors important to U.S. national security, including in rare earths, semiconductors, pharmaceuticals and steel, Bessent told CNBC on October 15, adding that the White House has identified seven industries and nonstrategic industries would not be under consideration.
