U.S. Backs USA Rare Earth with $1.6 Billion CHIPS Deal

The White House confirmed up to $1.6 billion in potential CHIPS funding for USA Rare Earth under a non-binding letter of intent with the Commerce Department and collaboration with the Department of Energy.
The package would pair $277 million in proposed federal support with a $1.3 billion senior secured loan, and is tied to milestones, approvals and the issuance of common stock and warrants to the government. Commerce would receive 16.1 million shares and roughly 17.6 million warrants, leaving the U.S. with about a 10% equity stake if executed.
Separately, USA Rare Earth secured a $1.5 billion PIPE anchored by Inflection Point, bringing prospective capital to about $3.1 billion to fund a mine-to-magnet supply chain that includes mining, processing, metal-making and magnet manufacturing.
The move aims to reduce reliance on Chinese processing and strengthen domestic supply of heavy rare earths used in high-strength magnets for defense, EVs and electronics. USA Rare Earth is developing a Texas heavy-rare-earth deposit with commercial production targeted for 2028 and expanding magnet production in Oklahoma for 2026 commercial output.
Markets reacted positively: the stock jumped 7.9% on the announcement, finished higher month-to-date and is up about 117% year-to-date. Analysts raised price targets and cited larger planned magnet capacity.