The Department of Commerce's CHIPS Research and Development Office released a Broad Agency Announcement on September 24, 2025 (No. 2025-NIST-CHIPS-CRDO-01) that, for the first time under CHIPS R&D, may require award recipients to give the government equity, warrants, IP licenses, royalties, or revenue-sharing instruments — a structural break from the grant-based model that previously governed the $11 billion R&D appropriation.

The BAA solicits proposals for research, prototyping, and commercial solutions advancing U.S. microelectronics, with funding drawn from the CHIPS and Science Act of 2022 (Pub. L. No. 117-167, Aug. 9, 2022). The opportunity stays open through September 2029, with awards issued on a rolling basis. Commerce has not yet set a date for the informational webinar, pending resolution of the government shutdown.

The post-Natcast context

The announcement follows a sharp institutional reset. In August 2025, Commerce removed Natcast — the non-profit it had selected to operate the National Semiconductor Technology Center (NSTC) — and rescinded $7.4 billion in previously awarded CHIPS R&D funds. The Department then confirmed it would administer remaining CHIPS R&D dollars directly, making this BAA the first vehicle for that direct administration. For R&D managers who had built collaboration plans around NSTC programs, the BAA effectively replaces that pipeline.

Government as partner, not grantor

The most consequential term for portfolio planning: applicants may be required to provide the Department with equity stakes, warrants, IP licenses, royalties, or revenue sharing. This aligns with a broader federal shift from "Government-as-grantor" to "Government-as-partner," a trend visible in recent months as the government took equity positions in companies executing federally funded domestic production projects, from semiconductors to critical minerals.

For university tech-transfer offices and corporate venture groups alike, that changes the calculus. A CHIPS-funded project is no longer a straightforward grant with standard Bayh-Dole-style IP treatment; it may function closer to a strategic investment with the federal government holding commercial upside. Applicants should model dilution, royalty obligations, and IP encumbrance scenarios before submitting white papers.

Priority topic areas

The BAA designates several priority areas. Core semiconductor topics include next-generation lithography and materials, devices, advanced packaging, design, and domestic manufacturing. Cross-cutting application areas cover AI, quantum technology, and biotechnology/biomanufacturing — a signal that proposals applying semiconductor advances to those domains will fare better in review. Commercialization and standards development round out the topic list.

Multi-stage review with a security filter

The process starts with a short white paper describing project scope. Commerce will invite applicants whose projects show sufficient scientific and technical merit and support national and economic security to submit a "Pre-negotiation Package" — effectively a full proposal. That package faces a second review against multiple criteria, again weighted toward national and economic security contributions. Teams whose work has dual-use or export-control sensitivity should prepare to address security posture from the white-paper stage onward.

Terms: OTAs plus domestic production strings

Commerce anticipates issuing awards as Other Transaction Agreements, which sit outside the standard terms of federal procurement contracts, cooperative agreements, and grants. But OTAs here do not mean term-light. The published Administrative and National Policy Requirements impose:

• Domestic production requirements, mandating that innovations developed with CHIPS funds be produced in the U.S. to the extent possible.
• Domestic control requirements restricting the sale or transfer of CHIPS-funded IP, including an outright ban on transfers to foreign adversaries.
• Investment and research security requirements protecting funded work from foreign entities of concern.
• Standard federal financial-assistance provisions, including the Davis-Bacon Act, the Section 889 telecommunications prohibition, and environmental permitting compliance.
• Executive Order 14173 (Jan. 21, 2025), which ends DEI programs carried out or enforced by federal agencies — a requirement that will affect how applicants structure workforce and outreach components.

What to weigh now

The domestic-control IP restrictions deserve early legal review. Any startup or university lab whose commercialization roadmap contemplates licensing to international buyers — or acquisition by a non-U.S. party — should assess whether CHIPS-funded IP fits that plan, given the ban on transfers to foreign adversaries and broader control requirements.

The equity provision cuts both ways. It signals the administration's willingness to fund projects it considers strategically important, but it prices that support in ownership terms rather than repayment. Companies with existing venture backers should expect term-sheet conversations about what a federal equity stake means for cap tables and future rounds.

With a four-year window and rolling awards, early applicants gain a first-mover advantage in shaping how CRDO interprets the BAA's evaluation criteria in practice. The first informational webinar, once scheduled after the shutdown ends, will likely clarify award sizes and the government's expectations on equity terms — details the BAA leaves open for now.