The "Americans Frontier Fund"... Who is behind it? How will the US chip industry develop?

The American newspaper "The New York Times" reported that a group of billionaires in America had established a fund to finance deep technology.

The newspaper added that the group - called the "Americans Frontier Fund" - includes billionaire former Google CEO Eric Schmidt, and co-founder of PayPal billionaire Peter Thiel, and not only funds the efforts itself, but wants American taxpayers to help with pay the bill.

Late last month, the White House directed the fund to lead the Quartet Investors Network, which the White House describes as an "independent consortium of investors seeking to advance access to capital for critical and emerging technologies" across the United States, Japan, India and Australia, the newspaper said.

CEO Gilman Lowe (an executive director of the CIA-backed investment fund NQ-Tel and a familiar face in Washington) was recently appointed to President Joe Biden's intelligence advisory board.

The New York Times report indicated that the group raises eyebrows and questions: What do billionaires want?

Will they direct government dollars towards the companies they invest in, or will they benefit from them?

"I'm not sure what this organization can accomplish, and the US government cannot do it on its own," said Gaurav Gupta, an emerging technology analyst at industrial research firm Gartner.

"As all of our national security committees have made clear, government, industry, academia, and philanthropy must work together if we want free and open societies to lead the next wave of innovation for the benefit of all," Schmidt told the newspaper. "The US Frontier Fund is an important bridge in this effort."

Intel made less revenue than South Korean rival Samsung in semiconductor production (Getty Images)

First Engine Advantage

The report says that the supremacy of the United States in the global innovation race that it led in the twentieth century is at stake, and the reason is - in large part - due to the breakthroughs that have been made in the field of American chips, and it is attributed to industry experts that not taking any action will enable China to reach the first place in technology.

And Edlin Levin, a quantum physicist and one of the founders of the fund, was quoted as saying that in the current trajectory, America is losing its grip, adding that in 2020, America accounted for only 12% of the global semiconductor manufacturing.

That year, the South Korean electronics giant Samsung's revenue exceeded those of the US chipmaker Intel.

And in 2021, Intel did the unthinkable, announcing that it would outsource more production to Asia, most notably to Taiwanese semiconductor manufacturing.

An approach that some have questioned amid supply chain struggles during the pandemic, and which some believe led to the departure of Intel CEO Bob Swann at the time.

Pat Gelsinger, who replaced Swan, took more than $43 billion from the company's board last year to build new chip-making plants, including a $20 billion investment in two new plants in Ohio.

US President Joe Biden cited these developments as examples of how to boost US manufacturing and revive local economies while striving to regain the title of No. 1 chip maker.

The report stated that progress in this endeavor has stalled due to measures that help in financing these efforts.

Last year, Congress passed the Act to Create Beneficial Incentives for Semiconductor Production, but it remains unfunded as lawmakers debate the details of a bipartisan innovation law, which would provide more than $50 billion for semiconductor production efforts, including the type of technology development that the fund hopes. "Americans Frontier Fund" investment in it.

In a speech last month, a frustrated Biden urged lawmakers to "pass the damn bill," and White House spokesman Michael Gowen said, "The president has been clear when he says we don't have a moment to lose."

The report noted that building chip manufacturing capacity is clearly a priority for America, and that the people who support the fund have the experience and deep connections to drive work on Washington and Wall Street.

But if this public-private effort can restore industrialization in a country that has long relied on Asian factories, it will require more than a slight shift in broader business operations and a lot of government dollars.

The group's founders say they are committed to the mission, whether they receive federal funding or not. "We don't need the government to give us permission to go save the country, but it would be great if they helped us," Lowe said.