31 August, 2026
Introduction
There’s a phrase you hear a lot in Washington these days: “strategic competition.” It sounds like policy-speak, but it describes something real and urgent. The U.S. is in a race to secure the technologies that will define the next few decades—not just for military advantage, but for economic resilience.
In the past three months alone, the U.S. government has announced a sweeping new science and technology strategy, signed agreements worth nearly a billion dollars for semiconductor research, and awarded half a billion to a startup working on materials to break foreign supply chain monopolies. Meanwhile, one of the biggest banks on Wall Street pledged to facilitate $1.5 trillion for U.S. innovation infrastructure.
It’s a lot to take in. Here’s what’s actually happening and why it matters.
A New National Strategy: What the White House Just Released
In August 2026, the White House unveiled the National Security Science and Technology Strategy (NSSTS)—the first document of its kind since 1995 . It’s 24 pages, and it’s the clearest statement yet of how the U.S. government thinks about technology competition.
The strategy organizes the U.S. approach around four priorities: focus, resilience, agility, and security . That means directing competition toward areas where the U.S. has advantages, reducing vulnerabilities in supply chains, accelerating innovation by removing regulatory hurdles, and protecting U.S. intellectual property from foreign exploitation .
What’s on the priority list? Artificial intelligence, autonomy, space, undersea systems, advanced manufacturing, semiconductors, nuclear energy, hypersonics, and cybersecurity, among others . The document also calls for expanding public-private partnerships and reforming defense procurement to shorten development cycles .
A notable shift: The strategy says the U.S. “will further strengthen its workforce by attracting and retaining top-tier global talent in critical national security S&T fields” . This is a change from the previous National Security Strategy, which suggested that global talent “undercuts American workers.” The shift reflects a recognition that you can’t maintain technological leadership without access to the world’s best minds .
$874 Million for the “Compute Supply Chain”
On July 29, 2026, the Commerce Department signed letters of intent with seven companies to provide $874 million in federal incentives under the CHIPS and Science Act .
Important detail: This is not for building chip factories. That’s a different part of the CHIPS Act. This $874 million is specifically for research and development—targeting the bottlenecks that are slowing down AI progress.
The three largest investments:
GlobalFoundries – Up to $300 million for co-packaged optics. This is the biggest single award. The funding aims to accelerate the development of silicon photonics technology—using light instead of electricity to move data between chips . Why does this matter? As AI models get bigger, moving data between chips has become a major bottleneck. Copper connections generate heat and consume power. Silicon photonics places optical components right next to AI processors, improving both speed and efficiency . The Commerce Department believes this could advance U.S. leadership in AI infrastructure by two to three years .
Kepler Computing – Up to $245 million for ferroelectric memory. Kepler is developing a new class of AI memory that combines 3D integration with ferroelectric technology—a material that retains data without continuous power . The advantage is architectural: traditional memory requires moving data across a high-bandwidth bus, which creates bottlenecks. Kepler’s approach allows certain operations to happen directly on the memory chip .
Multibeam Corporation – Up to $140 million for advanced packaging. Multibeam is developing technology that assembles and stacks multiple chips with thousands of connections—crucial for “Chiplet” designs, where chips are built as smaller components and combined into a single package .
The other investments: Extropic ($75M for energy-efficient computing), Thintronics ($50M for advanced interconnect materials), OBSIDIA Semiconductors ($34M for counterfeit detection), and Aeluma ($30M for photodetector substrates) .
One unusual detail: The Commerce Department is taking minority, non-controlling equity stakes in each company as part of the agreements . That means U.S. taxpayers could see returns if these technologies succeed—a departure from traditional one-way subsidies.
The $500 Million SandboxAQ Award: Replacing Foreign Monopolies
In June 2026, the Commerce Department signed a definitive agreement with SandboxAQ for a $500 million award under the CHIPS Act .
SandboxAQ is a startup backed by Nvidia, valued at $5.75 billion in April 2025 . What sets it apart is the type of AI it uses. Instead of being trained on human language or computer code, SandboxAQ’s AI systems are trained on physics, chemistry, and biology—what the company calls “Large Quantitative Models” (LQMs) .
The goal: Discover new materials for semiconductor manufacturing that break foreign supply chain monopolies. The award targets four specific areas :
1. PFAS-free chemicals. PFAS “forever chemicals” are used throughout chip manufacturing, and no compliant alternatives exist at scale. SandboxAQ will screen candidate materials to identify PFAS-free alternatives that match or exceed current performance .
2. Advanced catalysts. Catalysts play critical roles throughout the semiconductor fabrication process. SandboxAQ’s platform can screen catalyst candidates 20,000 times faster than traditional methods .
3. Rare earth-free magnets. China controls more than 90% of global production of neodymium-based permanent magnets—and those magnets are in every advanced chip printing machine . SandboxAQ will screen magnet chemistries that eliminate or reduce reliance on neodymium .
4. Advanced battery chemistries. Most chip factory backup power systems depend on lithium and cobalt, which are heavily concentrated overseas. SandboxAQ will develop battery chemistries that don’t depend on these materials .
As Commerce Secretary Howard Lutnick put it: “This award will accelerate the discovery and innovation of critical materials and reduce our reliance on foreign-controlled materials” .
Equity stake and royalties: The Commerce Department will receive a minority, non-controlling equity stake in SandboxAQ, plus royalty payments if the company successfully develops materials in the four focus areas .
Morgan Stanley’s $1.5 Trillion Pledge
In August 2026, Morgan Stanley announced it would facilitate $1.5 trillion in capital raising and financing over the next decade to back U.S. innovation infrastructure . The targets: AI, semiconductors, defense, and energy projects tied to national security.
The “U.S. Innovation Infrastructure Initiative” spans three focus areas: innovation platforms and strategic industries (AI, quantum, semiconductors, aerospace, critical minerals); infrastructure for the innovation economy (digital, physical, and energy infrastructure); and capital for builders and growth companies .
Dan Simkowitz, Morgan Stanley’s Co-President, framed it around America’s 250th anniversary: “The United States is entering a period of significant investment and innovation across technology, infrastructure, and strategic industries” .
The $1.5 trillion commitment arrives as federal programs have already committed more than $1 trillion in public funding since 2021 . For investors, it points to sustained capital flows into AI infrastructure, semiconductor manufacturing, energy grid modernization, and aerospace over the next decade .
The Bigger Picture: A New Industrial Strategy
The pattern across these developments is clear. The U.S. is making a deliberate, coordinated effort to rebuild the infrastructure—physical, intellectual, and institutional—for technology leadership.
The White House strategy provides the framework. The CHIPS Act’s R&D investments target specific technical bottlenecks in the AI computing stack. SandboxAQ’s award shows how the government is investing in materials discovery to break foreign supply chain monopolies. Morgan Stanley’s pledge provides the private capital to scale it all.
What makes this moment different is the coordination. And, as Commerce Secretary Lutnick said: “These strategic investments will enhance our country’s domestic capabilities, create high-paying jobs and keep America at the forefront of the semiconductor industry” .