The US government took major stakes in private companies tied to domestic economic security in 2025, backing semiconductor chip manufacturing and rare earth mining.
Now Wall Street is following suit. JPMorgan’s (US:JPM) decision to invest billions of dollars directly in American companies it deems “essential for our national security” shows how state and corporate interests are increasingly aligned as the US seeks to secure critical supply chains in its rivalry with China.
The world’s biggest bank will invest up to $10bn (£7.5bn) of equity and venture capital in US sectors from nano materials to defence components under its Security and Resiliency Initiative (SRI). The atypical move by the bank is “100 per cent commercial”, according to chair and chief executive Jamie Dimon.
“It has become painfully clear that the US has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing,” he argued.
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The bank will take its direct stakes as part of a $1.5tn decade-long financing strategy to boost US national economic security. The SRI is focused on supply chain and advanced manufacturing, defence and aerospace, energy independence and resilience, and frontier and strategic technologies.
A big name has been brought in to oversee the fund’s investments. JPMorgan announced in December that it had secured the services of Berkshire Hathaway (US:BRK.B) investment manager and Geico chief executive Todd Combs.
SRI’s first investment was a $75mn stake in gold miner Perpetua Resources (US:PPTA), which has broken ground on a project in Idaho. The Stibnite Gold Project is “expected to produce the only domestic reserve of the critical mineral antimony”, Perpetua said.
The SRI development came in the wake of the Trump administration’s purchases of material positions in US corporations and the president’s intervention in the workings of US Steel, which was acquired by Japan’s Nippon Steel (JP:5401). In August 2025, the US government diverted $8.9bn of federal grants to take a 10 per cent stake in struggling chip manufacturer Intel (US:INTC).
It also took stakes in rare earth miners such as Lithium Americas (US:LAC) and MP Materials (US:MP). JPMorgan was the sole adviser and arranger on the US Department of Defense’s (DoD) $1bn financing deal with the latter, which it said “carries key strategic implications for the US”.
The share prices of Intel and MP Materials have surged since, which highlights the risks and (potentially positive) implications for investors from the government picking favourites.
While it would be myopic to view JPMorgan’s fund in simplistic political terms, the US administration’s ‘America First’ agenda is vital context. The fund represents a bet on American exceptionalism in the form of direct investing in national security, supply chains and infrastructure.
A glance at the SRI’s advisory council reveals powerful backing from a mixture of private sector and state actors. Members include Amazon (US:AMZN) chair Jeff Bezos, Dell Technologies (US:DELL) chair and chief executive Michael Dell, former US secretary of state Condoleezza Rice and former US secretary of defence Robert Gates.
In other words, JPMorgan has positioned itself adroitly at the heart of a much-changed economic landscape. The MP Materials deal, which saw the DoD become the company’s biggest shareholder and customer, could be a sign of things to come with its unique form of state-private tie-up.
Only time will tell whether JPMorgan’s wager will pay off. But it’s difficult not to contrast this American capital injection with disunity in Europe about just how to address the challenge of subsidised and cheaper Chinese goods, as domestic producers such as carmakers continue to struggle with Asian competition.
Market dominance
JPMorgan has boosted its assets and returns under Dimon, who has headed the bank for almost two decades, to dominate the US market and deliver significantly higher profits than rivals. Over the first three quarters of 2025 it generated $44bn of net income, compared with $23bn at Bank of America (US:BAC) and $13bn at Goldman Sachs (US:GS).
The bank will release full-year earnings on 13 January. Consensus is for return on tangible equity (ROTE) of 20 per cent, while the company has guided for net interest income of around $25bn in the fourth quarter.
JPMorgan shares rose by a third in 2025 and have recovered since slipping in early December when the market was surprised by news that expenses in 2026 could be much higher than analyst forecasts. Management anticipates expenses will rise to $105bn in 2026, compared with the $96bn earmarked for 2025.
She added that investment banking fees are expected to grow by a “low-single-digits” percentage in the fourth quarter against last year, and markets revenue by a “low teens” percentage.
Unsurprisingly, JPMorgan has moved to protect profits in the current rate-cutting cycle. The Financial Times, citing data from BankRegData, reported that the bank pulled almost $350bn of cash from its holdings at the Federal Reserve in the past two years to buy US Treasuries.
Given November’s US annual inflation rate of 2.7 per cent was lower than expected, and that president Trump wants to appoint a new Federal Reserve chair “who believes in lower interest rates by a lot”, the consensus is for more rate reductions in 2026.
JPMorgan’s dominance is reflected in its valuation premium. It trades on 2.8 times price/tangible book value for 2026, with Goldman Sachs on 2.5 times and ahead of Wells Fargo (US:WFC) and Bank of America. Citi (US:C) lags behind peers on just one times.
