Yes, NIH funds many projects. Everything from individual investigators who discover new things to massive projects involving hundreds of sites. In fact, they funded so many projects that they found money to fund virus research in china (why????).
But my real points are: "allocation" is not actual spend. And if they do spend that much, they will grow the industry so fast it runs the risk of collapsing or at least not being sustainable, with the inevitable crashes following.
China recently allocated $41 Billion just to improve chip production. The US hasn't spent like that since the Apollo program.