GlobalFoundries has been awarded $1.5bn from the US government Credit: Getty Images / SOPA Images / Contributor

The US is awarding $1.5bn to GlobalFoundries to expand its semiconductor production as the country looks to boost its domestic chip manufacturing. 

The world’s third largest contract chipmaker is set to build new semiconductor factories in New York, as well as expand existing factories in the area and in Vermont, according to an announcement from the US government.

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The fresh funding for GlobalFoundries is expected to create $12.5bn in investment across the two states. 

GlobalFoundries’ funding is part of the CHIPS and Science Act, which is expected to create more than 10,000 jobs across a decade, according to US President Joe Biden’s administration.

The act, brought in by Biden’s administration, has earmarked $39bn in manufacturing grants to cover as much as 15% of the total cost of chip projects up to $3bn.

The Biden administration is also reportedly in talks with Intel to award the company more than $10bn in subsidies. 

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Intel recently announced it would be delaying the construction of its $20bn chipmaking project in Ohio, citing a slow rollout of US grant money and a challenging market.

Matt Iliffe, CEO at Beyond, previously told Verdict that the primary cost for AI development is the infrastructure to support the huge compute needed to support GenAI. 

“As adoption increases, investments in infrastructure will increase with it,” Iliffe said.

GlobalData predicts that the AI arms race in 2023, which saw companies rush to create their own large language models, will transition to the ‘AI chip race’ in 2024.

This will be seen in not only Big Tech companies but also among start-ups, which will look to create their own proprietary chips, according to GlobalData’s report.

GlobalData forecasts that the overall AI market will be worth $909bn by 2030, registering a compound annual growth rate (GAGR) of 35% between 2022 and 2030.

In the GenAI space, revenues are expected to grow from $1.8bn in 2022 to $33bn in 2027 at a CAGR of 80%.