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The US will invest over $5 billion in chip research and development as part of its implementation of the 2022 CHIPS and Science Act, the Biden administration announced Friday.
The money will go toward the National Semiconductor Technology Center (NSTC), a public-private consortium that aims to speed up technological advancements, improve national security, and support the US job market for chip industry workers.
"Semiconductors were invented in America and serve as the backbone of the modern economy. But today, the United States produces less than 10% of global supply and none of the most advanced chips," the Biden administration says.
The US plans to invest "at least hundreds of millions of dollars" toward an NSTC labor office that will help train and prepare chip industry workers in the country.
Semiconductors, commonly known as chips, are essential computer parts found in a vast array of devices, from phones to cars and planes. During the pandemic, a global chip shortage made it difficult to find computer graphics cards and cost the US an estimated $240 billion in 2021.
The CHIPS and Science Act, which Biden signed in August 2022, also aims to "counter China." The US government has since limited US chip exports to China over national security concerns and fears that China could use US tech to develop its own chips, AI tech, or weapons.
Now, the rise of tech like generative AI has once again underscored the importance of chips in an increasingly digital future, as AI tools suck up vast amounts of energy and chip computing power. Global chip demand is expected to continue to rise this year due to AI usage and electric vehicles, Nikkei Asia reports.
Nvidia, which had a blockbuster 2023 thanks to AI chip demand (it controls about 80% of the upscale AI chip market), is also reportedly establishing a new department to create "bespoke chips" for various companies.
The US government's substantial chip industry investment comes just days after the Biden administration also announced an AI safety group composed of over 200 member organizations, including companies like Microsoft, Apple, Amazon, Google, and OpenAI, with the goal of establishing guidelines on AI tech.