US awards SandboxAQ $500 million for chip materials and PFAS alternatives

The Trump administration is awarding SandboxAQ $500 million to develop chemicals and materials for American semiconductor plants, while also taking a minority, non-voting stake in the company through the arrangement. The CHIPS Act-funded package is aimed at reducing supply-chain bottlenecks and foreign dependence in chip manufacturing, including by seeking alternatives to PFAS compounds and rare-earth inputs sourced overseas. The work spans four areas: replacements and improvements for PFAS used in chip production, catalysts to speed chemical reactions during fabrication, and permanent magnets and batteries for manufacturing machinery that avoid rare earth elements from China or other foreign markets. SandboxAQ, backed by Nvidia and valued at $5.75 billion in April 2025, uses AI models trained on laboratory results, measurements and physics data rather than human writing or software code. The company has already applied that approach in biotechnology design and quantum navigation devices that operate without GPS. The award expands earlier CHIPS Act research allocations that sent $150 million to semiconductor production tools and $2 billion to quantum computing. Separately, the Commerce Department has not formally added DeepSeek, CXMT and more than 100 other Chinese technology firms to its Entity List despite an interagency review that marked them as national security threats, highlighting a parallel tension in U.S. technology policy as Washington seeks both to build domestic chip capacity and manage trade and security frictions with Beijing.