Why the US Government Had to Get Into the Manufacturing Business

In 2025 the federal government stopped subsidizing a handful of strategic manufacturers and started owning them. It took a 10% stake in Intel, a 15% stake in rare-earth miner MP Materials, a perpetual golden share in U.S. Steel, and warrants for 5% of Lithium Americas plus a 5% cut of its Nevada mine. The reason is plain: grants get spent and disappear, and markets would not finance chips, magnets, and lithium at prices China could undercut, so Washington bought the capacity instead of hoping a check would create it. For anyone underwriting Southwest industrial and land, the takeaway is that several of the anchors behind that demand now have the US Treasury on the cap table.

From check-writer to shareholder

The old model was the CHIPS and Science Act and the Inflation Reduction Act: grants and loans, paid out, no ownership. The problem with a grant is that once it is spent it is gone. It does not guarantee the plant runs, it gives taxpayers no upside if the company succeeds, and it does nothing about the one thing that actually kills a domestic mine or magnet line, which is a foreign competitor willing to sell below your cost until you close.

So in 2025 the structure flipped from subsidy to ownership. Four deals show the pattern.

Intel: a grant turned into 10% of the company

On August 22, 2025, Intel disclosed that the US government had purchased 433.3 million shares at $20.47 each, about $8.9 billion, for a 10% stake, which made Washington Intel's largest shareholder (CNBC, CBS News). The money was not new. It came from $5.7 billion in CHIPS Act grants Intel had been awarded but not yet received, plus $3.2 billion from the Secure Enclave program. In other words, a grant that would have been spent and gone was converted into equity the taxpayer actually holds.

Intel described the stake as passive, with no board seat and no governance or information rights, and the government also took a warrant to buy another 5% if Intel ever stops owning a majority of its foundry business (Intel release, via CNBC). Intel's leading-edge fabs sit in Chandler, Arizona, in metro Phoenix, next door to the TSMC build-out we have written about.

MP Materials: the government became the buyer, not just the owner

In July 2025 the Department of Defense put $400 million into MP Materials for roughly a 15% stake through convertible preferred stock, becoming its largest shareholder, and added a $150 million loan to expand heavy rare-earth separation (SEC Form 424B5; Chemical and Engineering News). The part that matters is not the equity. It is the price floor: the DoD guaranteed a minimum of $110 per kilogram for MP's neodymium-praseodymium oxide for ten years, and signed a ten-year agreement to buy magnet output from MP's new 10X facility (Institute for Energy Research; SEC filing).

That is the government solving the actual failure. A private lender will not finance a US magnet plant when China can flood the market and set the price below cost. A guaranteed floor and a guaranteed buyer makes the plant financeable. MP's Mountain Pass mine is in California and the 10X magnet facility is in Fort Worth, Texas.

U.S. Steel: a golden share instead of a veto

When Nippon Steel's roughly $14.9 billion purchase of U.S. Steel closed on June 18, 2025, at $55.00 per share, the condition was a national security agreement that handed the US government a golden share (CNBC; CBS News). It carries no dividends and no ordinary voting rights, and it is nontransferable and described as perpetual. What it does carry is the right to appoint one independent director and consent rights over a defined list: moving the headquarters out of Pittsburgh, renaming the company, shifting production or jobs overseas, cutting planned capital investment, or idling plants (CBS News, citing Commerce Secretary Lutnick). The full terms were not made public, so the enforcement teeth are uncertain. Here Washington did not want the upside. It wanted to lock the plants in place.

Lithium Americas: equity in exchange for a softer loan

On October 1, 2025, the Department of Energy restructured its loan to Lithium Americas and took warrants for 5% of the company at a one-cent exercise price, plus a separate 5% economic interest in the Thacker Pass joint venture with General Motors (Mining Weekly; electrive). In return, the government cleared a $435 million first draw on the $2.26 billion loan (confirmed October 20) and deferred $182 million of repayments over five years. GM holds 38% of the JV for $625 million and Lithium Americas holds 62% and runs it. Thacker Pass sits in Humboldt County, Nevada, which puts a federally backed lithium mine squarely in our Mountain West footprint.

Why it had to happen

Strip away the politics and three forces drove the shift. First, taxpayer return: if the government is going to fund a company, equity lets it recover money when the company does well, which a grant never does. Second, national security: the United States decided it could not depend on China for the chips, rare-earth magnets, steel, and lithium that go into both weapons and the grid, and private capital would not build that capacity at a loss. Third, leverage: China's control of rare-earth processing means a price floor and an offtake contract, not a subsidy, is what actually gets a plant financed. The common thread is that a check alone could not produce a running, protected domestic plant, so Washington bought ownership, guaranteed the price, or guaranteed the buyer.

What it means for the real estate under it

We do not own fabs, mines, or steel mills. We own, build, and reposition the industrial, retail, and land around the jobs they create, and we underwrite demand that depends on those anchors staying open. Government ownership changes the risk on the anchor. An Intel fab in Chandler, a lithium mine in Humboldt County, a magnet supply chain feeding Southwest manufacturing: when the Treasury holds equity, guarantees a price, or holds a golden share that forbids idling the plant, the probability that the anchor goes dark drops, and so does the tail risk on everything we own nearby.

The caution is the mirror image. A federally backstopped anchor is more durable, which can pull land basis and rents up on expectations that may be slow to show up in signed leases. We underwrite the demand that exists today, not the press release, and we separate the plant that is funded and under construction from the one that is announced. The 2025 shift tells us which projects now have a federal floor under them. It does not tell us the tenant has signed.

Sources

• CNBC, "U.S. government takes 10% stake in Intel, as Trump expands control over private sector" (August 22, 2025)
• CBS News, "Trump says U.S. government taking a 10% stake in tech giant Intel"
• CNBC, "Trump administration weighs 10% stake in Intel via CHIPS Act grants" (August 19, 2025)
• U.S. Securities and Exchange Commission, MP Materials Corp. Form 424B5 (FY2025)
• Chemical and Engineering News (C&EN), "US invests in rare earth firm MP Materials" (July 2025)
• Institute for Energy Research, "U.S. Defense Department Takes a Stake in a Rare Earth Company"
• CNBC, "U.S. Steel shares rally as Trump approves Nippon takeover with unique government 'golden share'" (June 16, 2025)
• CBS News, "U.S. Steel-Nippon deal includes 'golden share' giving Trump power to approve big corporate changes"
• Holland and Knight, "Nippon Steel and U.S. Steel Announce Finalized Merger Agreement" (June 2025)
• Mining Weekly, "DOE restructures Lithium Americas deal, secures equity stake in Thacker Pass project" (October 1, 2025)
• electrive.com, "US DOE takes equity stake in Lithium Americas' Thacker Pass project" (October 1, 2025)
• Lithium Americas Corp., Form 10-Q (FY2025) and company news release on the DOE loan first draw