The U.S. government is making significant equity investments in the AI supply chain, a rare move in recent history. Notably, it invested approximately $9 billion in Intel (ticker: INTC), acquiring around 10% of the company, and previously allocated $400 million to MP Materials (ticker: MP), which has seen a substantial rise in stock value since the investment.
This shift marks a departure from traditional government support methods such as contracts and tax breaks, indicating an aggressive industrial policy aimed at securing strategic sectors like semiconductors and rare earths. As a result, both Intel and MP have seen positive market reactions, boosting Wall Street’s confidence in “DC AI” stocks.
There may be more investments on the horizon, as officials suggest similar equity deals could target areas including chip production, rare earth supply, and robotics. Speculation is growing around potential candidates for future government backing, indicating a broader strategy focused on national security and infrastructure in the AI sector.
