US Invests $500 Million in AI Startup to Find Alternatives to China-Dominated Chip Materials

The public stake in SandboxAQ aims to accelerate the discovery of domestic-sourced alternatives for key industrial inputs.

Secretary of Commerce Howard Lutnick testifies before a House Appropriations Committee hearing on President Donald Trump's budget request for the Department of Commerce, on Capitol Hill, on June 5, 2025. Leah Millis/Reuters

The U.S. government is investing $500 million in an artificial intelligence startup as part of an effort to reduce reliance on imported materials critical to semiconductor manufacturing.

The Department of Commerce announced on June 17 that it has signed a definitive agreement awarding the money to SandboxAQ, a California-based company spun out of Google’s parent company, Alphabet, as an independent firm in 2022.