Washington is quietly buying corporate America.

Since 2025, the US government has mostly stopped handing companies free money and started buying pieces of them. It has taken equity, warrants, or preferred stock in at least 26 companies across nine industries: Intel, the country's largest rare earth miner MP Materials, US Steel, a new IBM-led quantum chip foundry, L3Harris's missile motor business. The Council on Foreign Relations runs a public tracker of these deals and counted $26.7 billion committed as of its last update. A defense bill signed in December 2025 raised the legal ceiling for this kind of investing from $60 billion to $205 billion, and most of that room is still unspent.

What actually changed

The old playbook was simple. A company needed money for research or a new plant, so the government wrote a grant or a loan and stepped back. It never owned anything and never shared in the upside.

The new playbook keeps the grants and loans, and adds two things on top: the government buys shares, and it promises to buy the company's output for years. It is not one policy. It is three tools, aimed at the same handful of companies, run at the same time.

The legal room for this got a lot bigger recently. The Development Finance Corporation, the agency that already invests abroad, was reauthorized through the FY2026 National Defense Authorization Act, which raised its contingent liability ceiling from $60 billion to $205 billion. A separate March 2025 executive order gave the DFC authority under the Defense Production Act to make these investments inside the US, not just overseas, specifically for mineral production. Public tallies of the deals since put about $23.9 billion actually deployed, which leaves roughly $181 billion in authorized capacity still sitting unspent.

The three tools, run together

None of these three is new on its own. Grants are old news, and the government has bought equity in a crisis before, General Motors and AIG in 2009 are the obvious example. What is new is stacking all three onto companies that are not in any crisis at all, in sectors the government has decided matter for national security: rare earth minerals, semiconductor chips, quantum computing, nuclear energy, defense manufacturing, steel.

The receipts

MP Materials is the cleanest worked example of why the stack matters more than any single piece of it. The Department of Defense is not just buying 15% of the company. It signed a 10 year contract for difference: if the market price of neodymium-praseodymium falls below $110 per kilogram, the DoD pays MP Materials the gap. If China floods the market and crashes prices, as it has done before to squeeze out competitors, MP Materials still gets $110/kg. On top of that, the DoD agreed to buy 100% of the output from MP's new 10X magnet plant for 10 years once it is running. A company with a guaranteed floor price and a guaranteed buyer can raise debt against that revenue the way a landlord raises a mortgage against a signed lease. A grant alone never gave a lender anything to underwrite against.

This already has a name

On February 3, 2025, the White House signed Executive Order 14196, directing the Treasury and Commerce secretaries to draft a plan for a United States sovereign wealth fund within 90 days, explicitly to promote US economic and strategic leadership internationally. Treasury Secretary Scott Bessent said at the time it would be running within 12 months. What has happened since, company by company, is what that fund looks like in practice before anyone finished naming it.

The comparison has a real gap in it, and researchers at the Carnegie Endowment have been the ones to spell it out. Norway and Singapore fund their wealth funds from oil surpluses or trade surpluses, money the state already has sitting around. The US runs a budget deficit, so a fund here has to be paid for by borrowing more, selling off government assets, or raising taxes and tariffs. It is a sovereign wealth fund with the wealth part still unresolved.

The US Steel golden share has drawn the sharpest pushback so far. The Competitive Enterprise Institute called it a breach of the government's proper role in a market economy. The Atlantic Council asked outright whether Trump had effectively nationalized US Steel. The Council on Foreign Relations, in a piece bluntly titled about the deal and magic beans, questioned whether a permanent veto handed to whoever holds the presidency is a national security tool or a permanent thumb on one company's board. Trump has already used the veto once, blocking a planned plant closure in Granite City, Illinois, that US Steel's own management wanted to make.

What is confirmed, and what is just a forecast

One piece of what comes next is already real money, not a guess. The FY2027 defense budget request includes close to $75 billion for drones and counter drone systems, the Pentagon's largest such request ever. Inside that, a little known line item called the Defense Autonomous Warfare Group jumps from $225.9 million in FY2026 to as much as $54.6 billion requested for FY2027, an increase of more than 24,000%. That single line now asks for more money than the entire Marine Corps budget request.

Why a build studio cares

Most of our clients are nowhere near a rare earth mine or a missile motor line. But the same logic that put MP Materials on this list applies to any founder building in a sector the government has flagged as strategic: materials, energy, chips, autonomy. If your sector sits inside that list, a guaranteed customer and a below market loan are now a live option, not political trivia, and that changes what a VC's diligence questions look like before you ever mention it. If your sector sits outside it, you are competing against companies whose revenue floor a government contract already priced in.

It is the same pattern we flagged in our post on device attestation and the EU digital wallet: a policy decided somewhere else quietly draws a line between who gets treated as inside the system and who does not, and it shows up in a term sheet or a funding round long before anyone reads the executive order that caused it.

Next step: read the Council on Foreign Relations' deal tracker for the full list of 26, the original analysis on Substack that first tallied them in one place, and MP Materials' own release for the contract for difference in full. If you are raising money in a sector the government has started treating as strategic and want a second opinion on how that changes your pitch, write to us at hello@gattyworks.com.