The Department of Commerce's CHIPS Research & Development Office signed a definitive agreement on June 17 for a $500 million award to SandboxAQ, the Nvidia-backed AI and quantum company, to accelerate AI-driven discovery of new materials for the semiconductor supply chain. The funding targets four programmatic areas: PFAS-free process chemicals to replace 'forever chemicals,' advanced catalysts, rare-earth-free magnets, and novel battery chemistries for fab backup power.
SandboxAQ's pitch is that it can compress traditional materials-development timelines by combining first-principles physics and chemistry simulation, AI optimization, high-throughput screening of millions of candidates, and targeted lab validation. Materials is one of the clearest fits for AI's search-and-simulation strengths, and the chip supply chain is exactly the kind of strategic bottleneck Washington wants to de-risk.
“The structural novelty is the deal terms: in connection with the award, the government will receive a minority, non-controlling equity stake in SandboxAQ.”
The structural novelty is the deal terms: in connection with the award, the government will receive a minority, non-controlling equity stake in SandboxAQ. That mirrors the equity-for-support model the administration has begun applying to strategic semiconductor players -- and it signals a meaningful shift in how the US funds frontier technology, taking upside rather than writing pure grants.