Trump’s $1.2 Trillion Bet: Taxpayer Dollars Fuel Critical Minerals & Semiconductor Stakes

Washington's vault just opened for Silicon Valley and mining giants.

The New Industrial Policy Playbook

Forget venture capital. The deepest pockets in America now belong to the Treasury—and they're placing billion-dollar bets on the tech and materials that will define the next century. It's a full-scale pivot from market-driven investment to strategic statecraft, with public funds securing private-sector dominance.

Silicon Foundries & Rare Earth Frontiers

The money flows two ways: toward domestic semiconductor fabrication plants that rival Taiwan's and into mines for lithium, cobalt, and rare earth elements. The goal isn't just profit—it's supply chain sovereignty. Every dollar deployed aims to cut geopolitical risk and bypass foreign dependencies, turning economic policy into a tool of national security.

The Balance Sheet of Power

This isn't subtle industrial nudging. It's a direct, aggressive deployment of capital designed to reshape global tech and trade maps. Critics see a dangerous blurring of lines between state and market, while proponents hail it as necessary catch-up in a fragmented world. Either way, the era of passive observation is over. The government is now a lead investor in the race for technological supremacy—and the portfolio is looking decidedly bullish on American hardware.

Wall Street analysts, meanwhile, are quietly updating their models: when the house always wins, it's usually playing with someone else's chips.

Steel, rare earths, and semiconductors now have government money in them

Let’s start with U.S. Steel. TRUMP only approved the company’s sale to Nippon Steel after getting a special power called a golden share. It doesn’t bring any profit, but it lets the president block decisions to shut plants, sell assets, or move the headquarters out of Pittsburgh.

U.S. Steel stopped trading in June 2025 and now operates as a Nippon subsidiary. Then there’s Intel. In August 2025, the Commerce Department bought 433.3 million shares, or 10% of Intel, using $8.9 billion pulled from CHIPS Act funds and other grants. The shares are non-voting. Howard said the goal wasn’t control, but financial support.

The Defense Department also went deep into rare earths. It invested in MP Materials, a company with a mine in Mountain Pass, California. The Pentagon bought $400 million in preferred stock and got a warrant that could give it 15% of the company. MP said that WOULD make the government its largest shareholder.

On the lithium front, the Department of Energy took a 5% stake in Lithium Americas, plus 5% in its joint project with GM. In return, it delayed $182 million in payments on a $2.3 billion loan. One Trump official allegedly told CNBC this structure gives taxpayers protection “if things go south.” The company’s listed in Canada and the U.S.

Even startups with no revenue are getting millions from Washington

Trilogy Metals, also based in Canada, has no revenue. It wants to mine copper in Alaska using a long, controversial road called Ambler Road. Trump approved the permits in October 2025. The government then threw in $35.6 million, taking a 10% stake and the right to buy another 7.5%.

USA Rare Earth, which plans to dig rare earths in Texas and build magnets in Oklahoma, got a $1.3 billion loan and $277 million in grants this year. In return, it handed the government 16.1 million shares and 17.6 million in warrants.

Depending on what happens with the warrants, the stake could land between 8% and 16%. CEO Barbara said this was an economic deal only. No government control.

Vulcan Elements, a private company from North Carolina, joined with ReElement Technologies to create a rare earth magnet supply chain. They’re building a 10,000 metric TON factory. The Pentagon gave them $620 million, Commerce gave them $550 million, and they raised the same amount from private investors. The government got a $50 million stake, plus warrants.

Meanwhile, xLight, a chip tool startup from Palo Alto, is working on free-electron lasers. In December, Commerce said it would take a $150 million equity stake if the company accepts federal funding.

Pentagon now owns part of a missile business and could buy into nuclear power

L3Harris, a huge defense company, struck a deal in December 2025 to get $1 billion from the Pentagon for its rocket motor division. The agreement says the division will go public in late 2026, and at that point, the Pentagon’s investment will become common stock in the new company.

The U.S. is also dipping into nuclear energy. The government signed a deal in October 2025 with Cameco and Brookfield to fund Westinghouse, which builds nuclear reactors. The full project is worth $80 billion. If Westinghouse grows past a $30 billion valuation, the government can demand an IPO before 2029 and walk away with 8% ownership, according to Cameco’s COO Grant.

All in, the Trump administration is using taxpayer money to buy into firms across rare earths, semiconductors, lithium, nuclear, and defense. These aren’t donations. They’re ownership deals, plain and simple. And the government now sits inside boardrooms it used to just regulate.

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