When governments take fairness stakes, buyers ought to listen. The US sovereign wealth fund (SWF) introduced in early 2025 shouldn’t be a symbolic coverage experiment or a passive reserve car. It’s rising as an lively investor in strategically crucial provide chains, with direct implications for valuation, capital flows, and aggressive dynamics throughout semiconductors, crucial minerals, and AI infrastructure.
Latest US investments in Intel, uncommon earth producer MP Supplies, lithium developer Lithium Americas, and Canadian miner Trilogy Metals reveal a constant technique: deploy state capital to anchor home and allied provide chains, then use that sign to crowd in non-public funding. This strategy blends industrial coverage with market participation, reshaping how danger is shared between the private and non-private sectors in industries deemed very important to technological and financial sovereignty.
The US sovereign wealth fund shouldn’t be merely supporting nationwide champions; it’s redefining how strategic sectors are financed. For monetary analysts and asset allocators, this marks a structural shift. Authorities stability sheets have gotten an specific a part of the capital stack, altering draw back danger, return expectations, and the long-term funding case for corporations embedded within the AI and superior manufacturing provide chain.
Anchoring Capital and Crowding In Non-public Funding
The US authorities’s equity-for-grants funding in Intel illustrates how state capital is getting used to reshape strategic markets in three vital methods.
First, it anchors expectations. By taking a direct fairness stake, the federal government signaled long-term dedication to home chip manufacturing, reinforcing Intel’s position as the one superior semiconductor producer working at scale on US soil. That sign issues for markets assessing execution danger and the sturdiness of US onshoring efforts in a sector dominated by Taiwan Semiconductor Manufacturing Firm and Korea’s Samsung.
Second, it constrains strategic exit. In purely industrial phrases, Intel faces stress to retreat from capital-intensive manufacturing and give attention to chip design, the place returns are sometimes much less unstable. From a supply-chain resilience perspective, nevertheless, a producing exit would undermine US efforts to safe home capability in superior semiconductors. By embedding strategic targets straight into the capital construction, authorities fairness alters that calculus.
Third, it crowds in non-public capital. Inside days of the US funding, SoftBank dedicated $2 billion, adopted by Nvidia’s $5 billion design and manufacturing partnership with Intel. Nvidia’s involvement, specifically, offered validation past public help. If the world’s dominant AI chip designer is keen to depend on Intel’s manufacturing capabilities, perceived execution danger falls, strengthening the funding case for extra non-public capital to observe.
Authorities funding alone, nevertheless, shouldn’t be ample to resolve Intel’s structural challenges. State capital doesn’t eradicate execution danger or assure competitiveness in opposition to extra established world foundries. Its position is catalytic quite than complete: to scale back strategic uncertainty, stabilize long-term commitments, and create circumstances below which non-public capital and industrial partnerships can scale. For buyers, this distinction issues. The presence of presidency fairness reshapes incentives and danger sharing, nevertheless it doesn’t substitute for operational self-discipline or market validation.
The identical capital allocation logic is seen within the US authorities’s funding in MP Supplies, the one totally built-in uncommon earth producer working in the USA. As with Intel, the target shouldn’t be merely to help a home firm, however to safe a strategically crucial section of the provision chain by means of direct fairness participation.
In July, the Division of Protection made a $400 million fairness funding in MP Supplies below the Protection Manufacturing Act. That stake signaled long-term authorities dedication to home uncommon earth processing and magnet manufacturing, an space the place US provide stays closely depending on overseas manufacturing.
As with Intel, the funding was designed to crowd in non-public capital and stabilize long-term demand. Following the federal government’s dedication, MP Supplies secured $1 billion in non-public financing from JPMorgan Chase and Goldman Sachs to construct its new “10X” magnet manufacturing facility in Texas. The Pentagon is positioned to turn into the corporate’s largest shareholder, supported by long-term offtake agreements that commit to buying the complete output of the brand new facility.
Uncommon earth magnets are crucial inputs for superior manufacturing, together with protection methods, aerospace, and semiconductors, which helps clarify why the Pentagon is positioned to turn into MP Supplies’ largest shareholder, with a possible stake of as much as 15% and long-term offtake agreements masking the ability’s full output.
The identical strategy is clear within the US authorities’s funding in Lithium Americas, which is growing the Thacker Move lithium challenge in Nevada. By means of a mixture of a restructured mortgage and a 5% fairness stake in each the corporate and the challenge three way partnership, the federal government is embedding itself straight within the capital construction of a useful resource crucial to battery manufacturing and superior manufacturing.
As with semiconductors and uncommon earths, the target shouldn’t be short-term monetary help however long-term provide assurance. By pairing fairness participation with project-level financing, the funding reduces growth danger, improves capital entry, and will increase the probability that home lithium manufacturing reaches industrial scale.
The technique shouldn’t be confined to US borders. The US authorities’s 10% fairness funding in Canadian mining firm Trilogy Metals displays a broader effort to safe entry to crucial minerals by means of allied provide chains, quite than relying solely on home manufacturing. Collectively, these investments recommend a repeatable mannequin quite than a collection of remoted interventions.
Provide Chains With out Borders
Trilogy Metals’ belongings, which embody copper deposits in Alaska, require substantial long-term capital to achieve manufacturing. By taking an fairness stake, the US authorities alerts strategic curiosity whereas positioning itself to help future growth alongside non-public buyers. The funding underscores that supply-chain resilience, in apply, typically is determined by cross-border capital alignment with trusted companions.
General, from semiconductors and uncommon earths to lithium and allied mining belongings, the US SWF is working much less as a passive allocator and extra as a strategic participant within the capital stack. Taken collectively, these investments level to a coherent effort to safe crucial segments of the provision chain underpinning the US AI Motion Plan, titled “Profitable the Race,” by means of direct fairness participation and capital coordination.
By taking fairness positions, pairing them with financing and offtake commitments, and utilizing these stakes to crowd in non-public capital, the federal government is reshaping how danger is shared in sectors deemed crucial to technological competitiveness.
This strategy locations the US alongside different sovereign buyers, significantly within the Center East, which are more and more mixing strategic targets with monetary returns in areas reminiscent of AI infrastructure and superior manufacturing. For buyers, the implication shouldn’t be that state capital eliminates danger, however that it alters incentives, time horizons, and draw back dynamics in chosen provide chains. As this mannequin expands, authorities stability sheets are more likely to stay an lively, and at occasions decisive, presence in strategically vital funding ecosystems.
That is half two of Ma’s US SWF collection. Learn the first half right here.
