From the Editor’s Desk
This month, Oracle and a consortium of investors moved closer to winning control of TikTok under terms that would net the government a multibillion-dollar fee. This builds on a series of novel ‘deals’ the White House has struck, including taking ownership stakes in major companies like Intel and MP Materials and securing revenue share agreements with Nvidia and AMD. While the federal government has stepped into markets before (our own partner Ron Bloom led the 2009 auto bailout) Trump is personally driving deals and doing it during it as part of the normal course of business, not during a crisis. Today, we break down what is actually going on with these deals and analyze what these moves signal about the shifting role of government in technology markets.
Uncle Sam's TikTok Commission
Ostensibly, the US government is enforcing the 2024 law requiring TikTok's divestment from Chinese control—but it's also collecting a multibillion-dollar fee for arranging the transaction. Under the preliminary framework, Oracle and Silver Lake would own roughly 50% of TikTok’s US operations, with existing investors like Susquehanna holding 30% and ByteDance's stake dropping below 20%. Also in on the deal: Michael Dell, Andreessen Horowitz, and Fox Corp. ByteDance would license a copy of its content recommendation algorithm to the new entity, which would then be "retrained" with US data and overseen by Oracle moving forward. ByteDance would choose one director on a seven-member board, and that person would be excluded from TikTok’s security committee.
Steel Yourself For Presidential Oversight
Japanese Steel giant Nippon Steel was allowed to take over US Steel in exchange for granting President Trump a “golden share,” or a special class of ownership stake in a publicly-traded company for a government. This deal included a condition that the federal government enjoy a veto over management decisions, and three months in to the agreement, President Trump has already exercised that power to block a plant closure in Granite City, Illinois. What politician wants to explain to voters why they had the power to save jobs but chose not to use it?
MP Materials 🤝 Pentagon
The Department of Defense invested $400 million in MP Materials, the operator of the only rare earth mineral mine in the United States, becoming a direct equity partner in critical supply chains. The Pentagon will buy 100% of a new magnet manufacturing facility’s output for 10 years to supply the defense industrial base, in addition to guaranteeing a minimum price for neodymium-praseodymium oxide, a rare earth compound used in magnets, to protect MP from foreign price dumping.
The government investment triggered a cascade of private capital: JP Morgan and Goldman Sachs lent MP $1 billion, and Apple signed a $500 million deal days later. If the Pentagon exercises all warrants, they'll own 15% of the company—more than the founder himself. Rather than simply contracting with suppliers, the government may become MP's largest shareholder and de facto business partner.
CHIPs to Equity: The Intel Deal
The US government now owns 10% of Intel. The deal is structured as a conversion of grant money, allocated to Intel via the CHIPs Act of 2022, into equity in the business. Intel spent $7.87 billion on projects covered by CHIPs but had only received $2.2 billion so far. Since the government investment has been inked, the existing CHIPs agreement between intel and the Department of Commerce has been amended, making the remaining $5.7 billion in cash available much more quickly.
Intel has struggled in recent years, but they could still readily access funding: SoftBank invested $2 billion days before the government deal. The Trump administration’s deal is about preventing Intel from selling their chip fabrication business, which has faced stiff competition from TSMC and Samsung: if Intel ever sells more than 49% of their foundry, the government can buy another 5% at $20 a share, roughly 20% below current prices.
Intel isn't the only US semiconductor firm, making the government's selective intervention notable. The administration is essentially betting it can influence Intel's strategic decisions through ownership rather than just subsidies—a clear example of how much weight the government can throw around in private markets when motivated.
*For more context on the CHIPs Act, check out this episode of Political Capital with Mike Schmidt, Director of the CHIPS Program at Department of Commerce.
Nvidia and AMD Have a New Business Partner
Chipmakers Nvidia and AMD announced a revenue share agreement where the US government receives 15% of revenue on chip sales to China in exchange for export licenses. This comes after years of restrictions on what chips can be sold to China, with Nvidia creating compliant H20 GPUs that generated over $16 billion annually for the Chinese market. The US is now effectively a joint venture partner in the chipmakers' Chinese sales, putting the federal government in the uncomfortable position of balancing America’s long-term geopolitical interests against the revenue it will gain from more chip transactions.
There are legal questions about this initiative and it is unclear whether it will hold up in court. Export taxes are unconstitutional and while the deal has been positioned as a “fee,” it functions like a tax.
Making Patents Pay
The Trump administration is exploring taking a cut of university patent revenues from federally-funded research. Commerce Secretary Lutnick indicated the government should receive "half the benefit" from patents developed with taxpayer money, stating: "The scientists get the patents, the universities get the patents, and the funder of $50 billion, the U.S. government, you know what we get? Zero." The administration has sent letters to Harvard seeking information on federally-funded patents, with Lutnick suggesting it will start with "a few universities" before making "a master deal."
The Federal Government is Deeply Committed to Intervening in Technology Markets, Regardless of Which Party is in Power.
Government engages with the tech industry in many ways, from spending billions on R&D to purchasing novel technologies at the federal and state/local level. As our American Tech white paper showed, government supported more than a quarter of VC-backed unicorns in some way.
Furthermore, upside has long been a part of government interventions. The Great Recession sparked multiple government interventions and investments, including major stakes in GM + Chrysler during the Auto Rescue of 2009 and warrants in major financial institutions during the Troubled Asset Relief Program (TARP). During the Covid-19 pandemic, the Department of the Treasury took warrants in the major airlines in exchange for pandemic relief payroll support. Direct interventions in tech markets are a long-standing, bipartisan effort.
What is new is the openly commercial, dealmaking posture of the Trump administration, especially absent a crisis. The government is vocally considering profit and upside from equity investments and joint ventures. In President Trump’s words on the Intel investment, “People come in and they need something. I hope I’m going to have many more cases like it.”
In a similar vein, Commerce Secretary Howard Lutnick has been openly discussing taking a stake in Lockheed Martin on the grounds that 97% of its revenue comes from the government.
The pattern is clear: government dealmaking is being normalized as a pillar of presidential economic policymaking.
Commonweal’s view: Love it or hate it, government is deepening its role in technology markets. Not since Teddy Roosevelt has any president intervened more actively in corporate America. Where Roosevelt met stiff business resistance, Trump is finding support or at least acceptance. If you are working on technologies that the government deems strategically important, bear in mind that famous advice: “You may not have an interest in politics but politics has an interest in you.”
We’re here to help the earliest stage companies get ahead of these shifts—and use them to your advantage.
