We have been getting a little squirmy about the Trump administration’s program of taking equity positions in private companies. We really like the idea of re-industrializing America, but we couldn’t quite overcome the feeling that we’d seen this movie before and didn’t like the ending.
Now our friend Stephen Moore, in a must-read article in a recent issue of his Committee to Unleash Prosperity Hotline, has given voice to our discomfort.
This is getting out of control, wrote Steve Moore. The Federal Government just bought a near billion-dollar stake in seven semiconductor companies. This comes on the heels of at least a dozen other companies the U.S. government has taken equity in, noted Mr. Moore.
Steve complained that they even used money from Biden's Chips Act slush fund - which should have been disbanded - to finance the deals. According to Steve, these are the companies that made the dubious decision to become partially state-owned:
- GlobalFoundries will receive up to $300 million to accelerate the domestic research and development of co-packaged optics by two to three years. By integrating photonics directly alongside AI processors, this technology will deliver ultra-fast, energy-efficient computing to reinforce U.S. leadership in AI infrastructure.
- Kepler will receive up to $245 million for R&D to develop in the U.S. a new class of high-performance AI memory technology enabled by innovative 3D and ferroelectric technologies.
- Multibeam Corporation will receive up to $140 million to develop advanced packaging technology to assemble and stack multiple chips and connect them with thousands of wires, which will enable more advanced systems necessary for AI and other advanced computing applications.
- Extropic will receive up to $75 million to develop thermodynamic sampling units (TSUs) which use natural thermal fluctuations to probabilistically solve complex problems spanning simulation, optimization, and AI, at a fraction of the energy consumed by conventional computing approaches.
- Thintronics will receive up to $50 million to develop ultra-low-loss inter-layer dielectrics required for next-generation semiconductor interconnects and advanced packaging in high-performance compute, AI, and networking infrastructure.
- OBSIDIA Semiconductors will receive up to $34 million for R&D to deliver non-invasive counterfeit and malicious component identification systems to ensure provenance and traceability in secure supply chains for AI and advanced electronics.
- Aeluma will receive up to $30 million to develop large diameter, indium-phosphide-free substrate technology used to fabricate photodetectors and lasers for AI photonic interconnects.
In a release post through NIST, the Department of Commerce announced the signing of 7 letters of intent to provide $874 million in federal incentives under the CHIPS and Science Act.
According to the release, these incentives will support innovative domestic technologies to dramatically increase the performance of the world’s fastest computers, secure domestic supply chains, and strengthen U.S. leadership in the compute supply chain.
The technologies that will be developed and accelerated by these research and development incentives will enable an infrastructure for advanced computing and AI systems that can progress key advances for multiple industries including materials innovation, industrial optimization, robotics, defense systems, drug discovery, and finance.
“With today’s compute supply chain investments, the Trump Administration is accelerating America’s innovation engine,” said Secretary of Commerce Howard Lutnick. “These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry.”
As Steve Moore asked rhetorically “who do these guys think they are, Warren Buffett?”
Steve Moore, asked, “How many Solyndras and Fiskers do we have to lose taxpayer money on before Washington admits they can't beat the market and that we'd probably be better off if they took the money to Vegas and bet on the roulette wheel?”
To those two sorry boondoggles we will add TARP, and the various auto industry bailouts, as examples of taxpayers footing the bill while government bureaucrats pick winners and losers in the marketplace.
Here's Steve Moore’s advice, with which we heartily agree: Take the corporate welfare money that is burning a hole in the pockets of the Commerce Department and use it to pay off some of our $39 trillion national debt.
