What Changed in the Grant Program

On Wednesday, the Commerce Department said it had reached initial funding agreements with seven technology companies for a combined $874 million under the CHIPS and Science Act. The companies have signed the preliminary paperwork, but each agreement is still subject to further review and formal approval before any money is dispersed.

Under the terms, the government has a minority stake that does not include voting control or decision-making authority. The department said this arrangement is meant to deliver a better return for American taxpayers.

Congress approved the CHIPS and Science Act in 2022, and President Joe Biden signed it into law that year. The new awards are among the latest moves in a broader government effort to rebuild domestic semiconductor production and reduce reliance on overseas supply chains.

Background

The federal CHIPS program is designed to encourage companies to manufacture and research advanced semiconductors in the United States. Washington already owns 10% of Intel from a separate CHIPS Act deal, and the new preliminary agreements use a similar structure. By taking a minority stake, the government aims to share in the upside if the companies grow in value while leaving business decisions in private hands.

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The Intel stake came from a separate agreement reached earlier under the CHIPS program. The seven preliminary agreements announced Wednesday follow the same model, with the government accepting a non-controlling ownership interest in exchange for financial support.

Where the Money Is Going

The seven recipients are Aeluma, Extropic, GlobalFoundries, Kepler, Multibeam Corporation, OBSIDIA Semiconductors, and Thintronics. According to the department, the funds are intended to back new U.S. technologies that could make the world's fastest computers more powerful, protect domestic supply chains, and keep America at the leading edge of the computing supply chain.

• GlobalFoundries is in line for as much as $300 million to shave two to three years off the U.S. research-and-development timeline for co-packaged optics. The technology places photonics directly next to AI processors to achieve ultra-fast, energy-efficient computing.
• Kepler could receive up to $245 million to create, in the United States, a new class of AI memory technology based on advanced 3D and ferroelectric techniques.
• Multibeam Corporation has been earmarked for as much as $140 million for work on advanced packaging that stacks multiple chips and links them with thousands of wires.
• Extropic could receive up to $75 million to construct thermodynamic sampling units, which use random thermal noise to solve difficult simulation, optimization, and AI problems while drawing far less power than conventional computing.
• Thintronics is in line for $50 million for new low-loss insulating layers needed in next-generation semiconductor wiring and advanced packaging for high-performance computing, AI, and networking infrastructure.
• OBSIDIA Semiconductors could get $34 million for research into detection systems that identify counterfeit or malicious components without invasive checks, making it possible to verify where chips came from and whether they are safe for use in AI and other advanced electronics.
• Aeluma may receive $30 million to produce large-diameter substrate technology that does not rely on indium phosphide, used to make photodetectors and lasers for AI photonic interconnects.

Why the Government Wants a Stake

The goal, according to the Commerce Department, is to ensure taxpayers benefit when these firms succeed. Howard Lutnick, the U.S. Commerce Secretary, announced: "With today's compute supply chain investments, the Trump Administration is accelerating America's innovation engine. These strategic investments will enhance our country's domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry."

The agreement provides Washington with a minority stake that does not control company decisions, while creating a financial return for taxpayers if the companies increase in value.

What Happens Next

The government said the minority holdings are designed to give taxpayers a share of any gains.

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