As US aids semiconductor industry, billionaire-backed tech fund enters spotlight

America’s Frontier Fund, supported by a former Google CEO, raises watchdogs’ concerns over how government investment will be steered to private companies

The Chips Act, meant to spur the US semiconductor industry, could end up handing ‘a lot of political power’ to a small number of billionaires, they warn

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Published: 11:00pm, 11 Aug 2022Updated: 2:36am, 12 Aug 2022

On May 23, just hours before the leaders of the United States, Australia, India and Japan converged on Tokyo for a summit to discuss their shared concerns about the Indo-Pacific region, the White House released a fact sheet that in retrospect was perhaps most notable for its omission.

The document listed a slew of initiatives including the launch of a Quad Investors Network described as “an independent consortium of investors” meant to make capital more accessible for critical and emerging technologies for the Quadrilateral Security Dialogue to which the four democracies belong.

While not specifically billed as an alliance against China, “the Quad” is widely understood to be motivated by Beijing’s growing influence in the region on many fronts, including technological competitiveness.

But absent from the White House’s announcement was the name of the group intended to steer the network: America’s Frontier Fund, a well-connected investment fund first mentioned publicly weeks earlier when President Joe Biden appointed its co-founder, Gilman Louie, to the President’s Intelligence Advisory Board. A press release at the time called AFF a “public-private partnership created to ensure that America leads the next wave of technology innovation”.

As US lawmakers and government officials across the political spectrum push for action to keep up with China technologically, Biden has signed legislation that will provide US$52 billion in subsidies for components that the military and a variety of industries depend on.

But now AFF, ideally placed to help determine government priorities under the Chips and Science Act, is piquing the interest of some tech industry watchdogs. They fear an excessive amount of private influence within the government creating a “clear conflict of interest”.