SandboxAQ announced a definitive agreement with the U.S. Department of Commerce’s CHIPS Research and Development Office that awards the company $500 million to develop critical materials for semiconductor manufacturing that are currently sourced from foreign suppliers.
The enterprise software company, which combines artificial intelligence and quantum technologies in its product suite, said the grant will be directed toward creating new molecules and formulations in four specified areas: PFAS-free process chemicals, catalysts, rare earth-free magnets, and battery systems. SandboxAQ plans to move successful discoveries into scaled domestic production through partnerships with American manufacturers.
To accelerate discovery, the company will further develop its ReAQT software platform along with its Large Quantitative Models (LQMs). These systems will be used to screen millions of candidate materials virtually to identify promising leads for laboratory testing. SandboxAQ describes its LQMs as AI systems trained on the laws of physics, chemistry, and biology rather than on human language.
Secretary of Commerce Howard Lutnick commented on the award, saying: "President Trump is committed to strengthening America’s semiconductor supply chain and ensuring national security. This award will accelerate the discovery and innovation of critical materials and reduce our reliance on foreign-controlled materials." As part of the agreement, the Department of Commerce will receive a minority, non-voting equity stake in SandboxAQ.
Jack Hidary, chief executive officer of SandboxAQ, emphasized the role of materials: "Securing America’s semiconductor future means controlling the materials that drive this vital sector. SandboxAQ’s Large Quantitative Models are grounded in the engineering and physics needed to address the needs of our domestic semiconductor sector."
The company laid out the four programmatic priorities in detail. First, it will pursue PFAS-free alternatives for heat-transfer fluids and coatings. Second, it aims to improve catalysts used for generating ultra-pure gases. Third, the program will develop magnets that reduce dependence on neodymium. Fourth, SandboxAQ will explore battery chemistries designed to eliminate reliance on lithium and other materials controlled by foreign suppliers.
The company highlighted a specific supply concentration risk in the magnet space, noting that China controls more than 90 percent of global neodymium-based permanent magnet production. Those magnets are used in chip printing machines, vacuum pumps, and precision actuators in semiconductor factories.
Implications
- SandboxAQ will combine computational screening and laboratory validation to translate AI-driven candidates into manufactured materials.
- The Commerce Department's minority, non-voting stake formalizes public-private alignment on materials independence for semiconductors.
The agreement frames a focused industrial effort to reduce reliance on foreign-controlled inputs for semiconductor fabrication, supporting downstream manufacturing by enabling domestic scale-up of new materials.