Washington Is an Investor Now: Inside the Government's Forty-Company Portfolio

Last Thursday, October 22, the Commerce Department signed four letters of intent offering up to $389 million in CHIPS and Science Act research awards to Helion, Commonwealth Fusion Systems, Vertical Semiconductor and Sibelco, and said it would take a “minority, non-controlling and non-voting equity stake” in each as a condition of the money.¹ Eight days earlier, GlobalFoundries announced that Japan will put up to $21 billion into two new fabs at its Malta, New York site, and that under a separate agreement the Commerce Department “will receive equity in GF of approximately four percent.”² The next day, a Cato Institute analyst counted 40 private companies in which the administration has announced or completed ownership stakes.³

Even the FAA is in. It has a term sheet for an equity stake in Air Space Intelligence, the contractor it hired in June on a 12-year contract worth up to $875 million to build its new air traffic management platform.⁴

Sixteen months ago the federal government owned a veto over one steel company. Today it is one of the most active buyers of corporate equity in the United States, and it publishes its purchases one press release at a time. This report explains how that happened, how the deals are built, what the stocks did afterward, where the buying follows a pattern, what the critics get right, and what to watch, starting with Intel's earnings on Thursday and the midterms a week from today.

How We Got Here: From a Golden Share to Forty Companies

The program began as a plan for a fund, not a portfolio. On February 3, 2025, President Trump signed Executive Order 14196, directing the Treasury and Commerce secretaries to deliver a plan for a United States sovereign wealth fund within 90 days, with the stated policy of maximizing “the stewardship of our national wealth for the sole benefit of American citizens.”⁵ No formal fund followed. What followed instead was a string of one-off deals that a Cato Institute analyst later described as a “pseudo-sovereign wealth fund under executive control.”⁶

The first position was a veto. On June 18, 2025, the government took a “golden share” in U.S. Steel as a condition of its sale to Nippon Steel.⁷ In July it bought $400 million of MP Materials stock, a purchase that made Washington the rare earth miner's biggest owner.⁸ Then on August 22, 2025, came Intel: a 9.9% stake,⁷ created by converting a 2022 CHIPS Act grant into roughly $8.9 billion of equity, with no seat on the board.⁹

The autumn brought the miners. On October 1, 2025, Lithium Americas said the Energy Department would take 5% of the company and 5% of its Thacker Pass project alongside a roughly $2.3 billion loan.⁸ Six days later Washington paid $35.6 million for 10% of Trilogy Metals, plus options on another 7.5%, while ordering permits for the access road to Alaska's Ambler mining district; Trilogy closed up 211% that day.¹⁰ On October 28, 2025, came Westinghouse: at least $80 billion of reactor financing in exchange for a “participation interest” in the company.¹¹

January 2026 added defense and rare earths. On January 13 the Pentagon agreed terms to put $1 billion into L3Harris's Missile Solutions business.¹² On January 26, Commerce signed a letter of intent with USA Rare Earth worth up to about $1.577 billion in direct funding and loans, in exchange for shares and warrants.¹³ A week later the White House announced Project Vault, a $12 billion critical minerals stockpile funded by $10 billion in Export-Import Bank loans and $2 billion of private capital.¹⁴

By February, CSIS put the total committed to equity stakes at about $10 billion, most of it Intel.⁹ By late July the count was 30 deals worth roughly $26.7 billion, spread across Commerce, Defense, Energy and the Development Finance Corporation, with no single ledger that lists them all.¹⁵ In the last week of July, Commerce announced seven more letters of intent, $874 million in CHIPS incentives to GlobalFoundries, Kepler, Multibeam and four smaller firms, each carrying “a minority, non-controlling equity stake.”¹⁶ On August 7 the White House said it had “signed or approved 160 minerals deals totaling almost $40B” since January 2025.¹⁷ Then came October: GlobalFoundries on the 14th,² the four fusion and power-chip letters on the 22nd,¹ and the count of 40 on the 23rd.³

How the Stakes Are Built

Washington does not buy stock the way a fund does. It attaches equity to money it was already going to hand out. The four structures it uses tell you where the next deal can come from, because each needs a specific program behind it.

The first is the converted grant. Intel's filings name the Commerce Department as a shareholder under a “Warrant and Common Stock Agreement” covering 433.3 million shares at $20.47 each. About two-thirds of the shares were delivered at closing; the rest sit in escrow, to be released as Intel hits milestones under a Pentagon chip program. The stake is passive, with no board seat or information rights.¹⁵ The same machinery now runs the CHIPS research office: by late July it had announced 19 awards since December, covering 18 companies, all publicly tied to equity, and Commerce's funding rules let it ask recipients for equity, warrants, IP licenses, royalties or revenue sharing.⁶

The second is the loan with warrants. The Energy Department's $2.26 billion loan to Lithium Americas was restructured so that the government receives its 5% of the company through warrants, plus a 5% stake in the Thacker Pass joint venture with General Motors.¹⁸ USA Rare Earth's shares and warrants would leave Washington holding between roughly 8% and 16%, depending on whether it exercises them.¹³

The third is Pentagon preferred stock. In the MP Materials deal, the Defense Department agreed to buy $400 million of a newly created preferred series convertible into common stock at $30.03 a share, took a warrant to buy more, set a 10-year price floor of $110 per kilogram for the company's NdPr rare earth products, and committed that 100% of the magnets from a planned second plant would be purchased for ten years.¹⁹ For L3Harris, the $1 billion is a convertible preferred security that turns into common equity when the Missile Solutions business holds its initial public offering, which L3Harris has planned for the second half of this year, with the partnership aimed at expanding solid rocket motor capacity.¹²

✓ Trusted partner One research team says it tracks every one of these government positions and has identified the company it believes Washington is likely to buy into next →

The fourth is the contingent interest. Westinghouse's owners, Cameco and Brookfield, agreed that once the government reaches a final investment decision on at least $80 billion of reactor construction, it will receive 20% of Westinghouse's cash distributions above $17.5 billion. If that interest has vested by January 2029 and the expected IPO valuation is $30 billion or more, the government can require an IPO, and its interest converts into a five-year warrant for 20% of the public value above $17.5 billion.¹¹ The U.S. Steel golden share is the odd one out: veto rights without a conventional economic interest.⁶

The stated rationale is consistent. The Commerce Department says the equity is there “to enhance the return for the U.S. taxpayer.”¹⁶ National Economic Council director Kevin Hassett told CNBC after the Intel deal: “It's like a down payment on a sovereign wealth fund, which many countries have.”¹⁵ What is missing is the bookkeeping. The stakes sit in at least four agencies, only the Development Finance Corporation has clear statutory authority to own equity, and the Intel position's rise from $8.9 billion to $42 billion appeared in no budget document.¹⁵

What the Stocks Did

On announcement day the pattern is almost mechanical. MP Materials rose 50% the day the Pentagon deal was announced. Intel rose 5.5%. Lithium Americas gapped up 23.3%. When Commerce signaled $2 billion of quantum computing awards with equity attached on May 21, IBM rose 12.4%, and D-Wave, Rigetti and Infleqtion jumped 33%, 30.5% and 31.5%.⁷ Trilogy Metals rose more than 230% intraday before closing up 211%.¹⁰

Intel is the position that made the program look like a portfolio. By early June the stock traded at $120.89,⁷ and in late July Fortune valued the government's 9.9% at $42 billion, against a cost of $8.9 billion.¹⁵ It has since given some back. It fell 5.34% on October 8 to $107.08 with no company news behind the move,²⁰ closed at $91.69 on October 20,²¹ and the Cato analyst wrote on October 23 that selling the entire stake today would net roughly $28 billion.³ That is still more than three times what Washington paid. It is also a swing of about $14 billion in three months.

The smaller names tell the harder story. MP Materials peaked at $100.25 on October 14, 2025 and was back at $64.23 by June. Lithium Americas hit $10.51 in mid-October 2025 and traded at $5.05 by June. USA Rare Earth reached $32.07 after the stockpile announcement and sat at $28.19 four months later. L3Harris rose 0.5% the day after its news and was lower by June.⁷ When the GlobalFoundries stake was announced, President Trump wrote on Truth Social that “the U.S. Government's stake is worth over 2 Billion Dollars” and that the deal “brings our total Investments to 1.63 Billion Dollars.”²²

The lesson is simple. A federal stake is a signal about where federal money and federal attention are going, and the market prices that signal in a single session. What happens next depends on the business, not the shareholder.

A federal stake is a signal about where federal money and federal attention are going, and the market prices that signal in a single session.

Where Washington Buys: The Pattern

Line up the names and they sort into a handful of categories. The sector list as of July ran to quantum computing, semiconductors, critical minerals, steel, nuclear energy and rocket motors,²³ and October added air traffic software⁴ and fusion power electronics.¹ Underneath the sectors are three conditions that keep recurring.

The first is a grant program Washington can convert. Every CHIPS research award since December has carried equity,⁶ and the July and October letters of intent make the stake a condition of the funds.^16, 1 The clearest case is GlobalFoundries: a proposed stake of roughly 1% under a separate agreement alongside $675 million of CHIPS letters in May,²³ a $300 million letter in the July batch,¹⁶ and about 4% in October.² Repeat customers are a pattern of their own.

The second is a supply chain that runs through China. The minerals deals are the purest example: MP Materials for rare earth magnets, with a 10-year price floor underneath it,¹⁹ Lithium Americas, Trilogy for the Ambler mining district,¹⁰ USA Rare Earth,¹³ and a $12 billion stockpile that the President said would “ensure that American businesses and workers are never harmed by any shortage.”¹⁴ Energy Secretary Chris Wright said the Thacker Pass deal “helps reduce our dependence on foreign adversaries for critical minerals.”⁸ The White House's own tally is 160 minerals deals worth almost $40 billion in twenty months.¹⁷

The third is a contractor the government depends on that needs capital. L3Harris's rocket motors feed PAC-3, THAAD, Tomahawk and Standard Missile.¹² Air Space Intelligence is building the FAA's new air traffic platform under rising cost and schedule pressure.⁴ Westinghouse's interest only vests once Washington commits to at least $80 billion of reactor construction.¹¹ In each case the government is the customer as well as the shareholder, and the equity lets it share in what its own orders create.

Two newer wrinkles matter. The program has moved into private companies: Helion, which closed a $465 million Series G at a $15.5 billion valuation in June,²⁴ now has a proposed $175 million federal stake that one estimate puts at about 1% of the company,²⁵ and the stakes in Vulcan Elements and xLight have no public SEC filings at all.¹⁵ Private deals do not move a ticker. The other wrinkle is scale: a $35.6 million purchase moved Trilogy 211%,¹⁰ while $8.9 billion moved Intel 5.5%.^7, 9 If the pattern holds, the categories to watch are small listed miners with a federal permit problem, chip-equipment and power-semiconductor suppliers with pending CHIPS letters, defense suppliers spinning out a unit, and the nuclear supply chain. Jonathan Hillman, who keeps the Council on Foreign Relations tracker, told Fortune that “the deals that have been announced to date are only the tip of the iceberg.”¹⁵

The Critics' Case

The sharpest objections come from the free-market right. Tad DeHaven of the Cato Institute wrote on October 23 that “when the government picks a racehorse, that horse is given advantages and privileges” its competitors do not get, and that the idea Washington will stay a passive shareholder is “a painfully naïve view of how Washington works.” He added: “The Trump administration is already using contracts and regulatory authority to favor companies it owns.”³ In July: “Competitors have reason to question whether the playing field is level.”⁶

The Center for Strategic and International Studies raised the structural problem in February: “potential conflicts between the role of the government as an investor in a particular company and its role as a regulator.” Favoritism, the authors wrote, “may distort competition, stifle innovation,” and public confidence erodes if selections “seem to be driven by political connections rather than strategic merit.”⁹ Vance Ginn of the American Institute for Economic Research was blunter: “Once government crosses the line into equity ownership, the game changes.”²²

Congress has objections of its own. In March, Representative Zoe Lofgren, the ranking Democrat on the House Science Committee, wrote to Commerce Secretary Howard Lutnick that the department's use of CHIPS Act authority for equity stakes is “legally dubious” and that federal equity stakes are “a terrible idea, plain and simple.”¹³ Republicans have been quieter but not silent. Representative Pat Harrigan warned of “unintended consequences” when the government takes stakes in firms it also regulates, and Senator Rick Scott has described government investment in private companies as a last resort.²⁶

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The public is not sold either. A July CNBC poll found 49% of voters consider government ownership stakes in U.S. companies inappropriate and 19% support them, and an Intel shareholder suit is challenging the legal basis for equity demands tied to CHIPS funding.²⁶ None of this is a reason for an investor to ignore the program. It is a reason to know that its legal and political foundations are being tested in real time, and that the test has a date.

The Honest Risks

Risk one: the pop fades. Of the listed names with a federal stake, MP Materials, Lithium Americas and USA Rare Earth all traded well below their post-announcement peaks by June, and L3Harris was lower.⁷ Intel, the flagship, is worth about a third less than it was in July.^15, 3 Buying after the press release has, so far, been the expensive way to own these stocks.

Risk two: dilution. Nearly every deal carries warrants or a conversion feature. Trilogy's package includes options on a further 7.5%.¹⁰ USA Rare Earth's includes warrants for 17.6 million shares on top of 16.1 million issued.¹³ MP Materials' preferred converts at $30.03 and comes with a warrant, which is how the Pentagon is positioned to become the largest shareholder.¹⁹ Lithium Americas' 5% arrives through warrants.¹⁸ Washington's stake can grow without buying another share.

Risk three: a letter is not a deal. The October 22 awards are letters of intent; definitive agreements, final awards and the equity transactions themselves are still to come.¹ The July batch carried the same caveat.¹⁶ Fortune found that some of the 30 deals it counted, including nine quantum computing arrangements announced in a single week, are closer to term sheets than signed agreements.¹⁵ A letter can be renegotiated or quietly dropped, and the stock will already have moved on it.

Risk four: politics. The midterm election is a week from today, November 3. Republicans hold the House 218 to 214 and the Senate 53 to 47, and Democrats need a net gain of four seats in each chamber to take control.²⁷ If they do, pressure to unwind or restrict the equity arrangements becomes, as one August analysis put it, “a real scenario.”²⁶ DeHaven's warning cuts the other way too: supporters “should consider what a Democratic president might do with those stakes after Trump is no longer in office,” and Doug Farrar, a former aide to Lina Khan, already imagines a future president “leveraging government ownership to turn the screws on AI companies.”³

Risk five: the stake is not a guarantee. CSIS said it plainly: there is “no guarantee of success or profitability.”⁹ Nobody should own a stock only because Washington does.

What to Watch

Thursday, October 29: Intel reports third-quarter results after the close.²¹ It is the government's largest position, and at 433.3 million shares, every dollar the stock moves changes the headline value of the whole program by roughly $433 million.¹⁵

Tuesday, November 3: the midterms. Control of either chamber changes the odds that the stakes are investigated, restricted or unwound.^27, 26

The pending letters. Seven July letters worth $874 million¹⁶ and four October letters worth $389 million¹ still have to become definitive agreements. Each conversion confirms the equity; each new letter is a new name on the list.

The spinouts and IPOs. L3Harris planned the Missile Solutions IPO for the second half of 2026, and the Pentagon's $1 billion preferred converts into common stock when it prices.¹² Westinghouse's interest can force an IPO from January 2029 once it vests.¹¹ GlobalFoundries expects to break ground on the first Japan-funded fab later this year.²

The next agency. Commerce, Energy, Defense and the Development Finance Corporation hold stakes today,¹⁵ and the FAA is negotiating one.⁴ If that term sheet closes, any agency with a large contractor and a modernization budget becomes a candidate.

The federal government has become a large, patient, price-insensitive buyer that discloses every purchase, attaches its money to programs anyone can read about, and buys where a grant can be converted, a supply chain runs through China, or a contractor it needs is short of capital. The stocks it buys move the day the news lands, and the smaller the company, the bigger the move.^10, 7

That makes the investor's problem unusually specific. The returns from this program have not gone to the people who read the press release. They went to whoever already owned the stock when Washington called. Knowing the pattern narrows the field. Knowing which company inside the pattern is closest to a signed letter is the hard part, and the part worth watching in the weeks around an election that could change the rules.