The Scoop
Michael Grimes brought Silicon Valley-style investing to the White House. Now the longtime adviser to Elon Musk is heading back to California.
The tech industry’s speed-dial banker is leaving the US Commerce Department, where he ran the government’s venture arm, people familiar with the matter said.
Commerce Secretary Howard Lutnick will take over the effort, which has overseen most of the White House’s investments in the private sector — an unprecedented bit of industrial policy and Trumpian dealmaking aimed at bulking up national security sectors. Lutnick has been recruiting from Wall Street banks and private-equity firms in recent weeks to scout projects, some of the people said.
Using money authorized by Congress in the 2022 CHIPS Act, the Commerce Department’s investment accelerator houses the government’s stakes in Intel and two rare-earth minerals companies, and controls its board seat at US Steel.
The fund will also house hundreds of billions of dollars promised by Japan, Taiwan, and South Korea as part of trade deals with the US, giving it more than $1 trillion to direct toward White House priorities.
It’s been run without formal congressional authorization by a crew of Wall Street veterans that also includes David Shapiro, a former M&A partner at Wachtell Lipton. Grimes declined to comment through a Commerce spokesman.
It isn’t clear what Grimes, who took some of Silicon Valley’s biggest companies public during a 30-year career at Morgan Stanley, will do next. (One consideration: He’s likely to be involved in the record-setting IPO of Musk’s SpaceX later this year.)
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Japan has promised to invest $550 billion in the US, with projects expected to be announced in the coming weeks ahead of a visit by Prime Minister Sanae Takaichi. One investment is likely to be in a synthetic diamond factory, aimed at countering China’s recent export limits on lab-grown gems that can be used in military-grade weapons, Reuters reported Monday.
Taiwan has pledged $500 billion of investments from its semiconductor national champions and government loans, and South Korea rushed to pass legislation authorizing the $350 billion it pledged in July.
Much of that money will be overseen by Commerce, forming the basis of the sovereign-wealth fund that President Donald Trump has long wanted.
Sovereign-wealth funds are rare in developed Western economies, where the private sector, not the government, directs investments.
But under Trump, the US government has taken stakes in about a dozen private companies, boosting the companies’ stocks and providing the administration with more power over critical sectors like minerals and defense.
At the high end of those promises, the US fund would be larger than Saudi Arabia’s Public Investment Fund, which has emerged as one of the biggest financial forces on the planet and could serve as a model for Trump’s ambitions.