SandboxAQ secures $500M CHIPS Act funding for quantum-AI research

SandboxAQ just landed half a billion dollars from the US government to do something deceptively simple: find better stuff to make chips with.

The $500 million award, announced on June 17 from the US Department of Commerce’s CHIPS Research and Development Office, represents one of the most substantial CHIPS R&D commitments explicitly aimed at materials discovery. The goal is to use quantum-AI simulations to identify alternative materials for semiconductor manufacturing, reducing American dependence on foreign-controlled supply chains in the process.

What SandboxAQ is actually building

SandboxAQ’s approach is to skip most of that guesswork. The company’s ReAQT platform and what it calls Large Quantitative Models (LQMs) use high-fidelity simulations to evaluate millions of potential materials for semiconductor manufacturing. Instead of testing candidate materials one by one in a lab, AI models narrow the field to the most promising options before anyone picks up a beaker.

The research targets are specific and strategically chosen. The company will focus on PFAS-free process chemicals, advanced catalysts, rare earth-free magnets, and alternative battery systems. Promising candidates identified through simulation will transition to lab validation and eventually domestic production through partnerships with US-based firms. The company has also been collaborating with NVIDIA on AQCat workflows for advanced catalyst discovery.

The government wants skin in the game

One detail worth pausing on: as part of the deal, the US Department of Commerce will receive a minority, non-voting equity stake in SandboxAQ.

Commerce Secretary Howard Lutnick framed the award in supply chain terms, emphasizing the need to fortify domestic semiconductor infrastructure. SandboxAQ CEO Jack Hidary pointed to the role of LQMs in securing control over materials that underpin the entire chip industry.

Jack Hidary noted the critical role of LQMs in “securing control over domestic materials” in the semiconductor industry, calling it vital for innovation and sustainability.

SandboxAQ was spun out of Alphabet in 2022 and has raised over $950 million since then. This single CHIPS Act award represents more than half of the company’s total fundraising history.

Why this matters beyond semiconductors

The focus on PFAS-free alternatives is particularly timely. PFAS, sometimes called “forever chemicals,” are used extensively in semiconductor manufacturing but face growing regulatory pressure in the US and Europe.

Similarly, rare earth-free magnets could reshape the economics of not just semiconductors but electric vehicles, wind turbines, and defense systems. China controls roughly the vast majority of global rare earth processing, a leverage point that has already been weaponized through export restrictions.

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