US awards $500 million to Nvidia-backed SandboxAQ for finding new chipmaking materials

The U.S. government awarded $500 million to Nvidia-backed SandboxAQ to accelerate discovery of new chemicals and materials for domestic semiconductor manufacturing. The contract focuses on reducing reliance on vulnerable foreign supply chains by developing substitutes for PFAS chemicals, catalysts for chipmaking reactions, and permanent magnets and batteries that avoid rare-earth imports, especially from China. The Commerce Department will take a minority, non-voting stake and receive royalties if SandboxAQ’s formulas are commercialized. For Nvidia, the news reinforces its exposure to the broader AI and semiconductor ecosystem rather than direct chip sales, while the award could support longer-term U.S. chip supply-chain resilience and domestic manufacturing capabilities.