The ties between startups and the US government have been strengthened in recent years, supporting a shift supported by interest in the use of AI, automation, space, robotics and climate technology. And although it provided another welcome path to capital, the relationship is complicated.
To increase the startup’s share, the US government is aiming to be a client or license and defense-related contract. If it is operated by the government, the connection can provide the boost and revenue needed for the startup. However, when the government stops working as it began on October 1, their close relationships can even stifle or halt the progress of the startup.
On equity this week, Anthony Ha, Max Zeff and myself (Kirsten Korosek) talk about how long-term US government closures pose more risks for startups than they have in the past. The three of us also digged into several other topics, including how AI companies are trying to monetize and the latest push for the US government to gain ownership in the tech and industrial sectors.
“This also feels like it reflects how the situation has changed for startups, especially over the past decade,” HA said on its Equity Podcast. “Obviously, there’s a lot more going on with defense technology, and there’s more to it with deep technology that requires different kinds of regulatory approval,” he continued. “So it feels like the much broader Swass in the startup landscape is dependent on government in a variety of ways, in ways that were not necessarily true a decade ago.”
But it’s not just startups. The Trump administration also continues to expand its scope and ownership into the technology industry.
The Trump administration has renegotiated yet another federal loan – the third in recent months, using materials from Intel and Rare Earth Mines MP that followed – and took stock in the stock as part of a newly hashed deal.
The US government took a 5% stake in Canadian miner Lithium America and acquired 5% ownership in the Lithium America joint venture of Nevada’s lithium mines. Stocks are acquired through a non-cost warrant, a financial instrument that grants the government the right to purchase shares at a set price. The new terms emerged from renegotiation with DOE’s loan program office for a $2.26 billion loan awarded to Lithium America under the Biden administration.
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Watch the entire episode and hear more about the government’s relationship with startups and tech companies, the entertainment industry’s reaction to AI-generated actress Tilly Norwood, and the eye-opening seed rounds of regular labs.
Equity is TechCrunch’s flagship podcast produced by Teresa Loconsolo, posted every Wednesday and Friday. Subscribe to us with Apple Podcasts, Cloudy, Spotify, and all casts. You can also follow X and thread equity, @EquityPod.
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