The US Commerce Department has signed a letter of intent to give GlobalFoundries $300 million in CHIPS Act funding, in exchange for a roughly one percent equity stake in the chipmaker. The funding is aimed at accelerating development of silicon photonics networking technology, which the AI industry increasingly needs to connect the growing numbers of accelerators packed into modern datacentre systems, as copper interconnects struggle at higher speeds and larger scales.

The one percent stake is valued at around $269 million, and Commerce Secretary Howard Lutnick framed the deal as boosting domestic semiconductor capability and jobs rather than a straightforward trade. The money will support GlobalFoundries' existing Silicon Photonics Co-Packaged Advanced Light Engine (SCALE) programme, aimed at 400 Gb/s per-lane connectivity, alongside new optical materials and 3D hybrid bonding packaging for co-packaged and near-packaged optics. This follows a similar move last year in which Washington converted $8.9 billion of CHIPS Act and Secure Enclave awards into a roughly 10 percent stake in Intel, which separately this week concluded its RAMP-C defence test chip programme as it shifts focus to the new Secure Enclave initiative.