Quantum News Nexus

The US federal government, at President Trump’s bidding, has taken equity stakes in companies in the rare earth mining, steel, and semiconductor sectors. Is quantum next?

The Wall Street Journal has an exclusive report (subscription required) saying that the Trump administration has been talking to several quantum computing companies about funding arrangements of potentially $10 million each to give the government equity stakes in firms it views as strategic to US national security and the economy.

The report mentions IonQ, Rigetti Computing, and D-Wave Quantum by name, but suggests that a larger number of companies could be under consideration. It’s not entirely clear if that means the government would invest in one, or a few, or many more firms.

This news arrives at a curious time, as reports have circulated for weeks that the Trump administration was close to issuing an Executive Order focused on the quantum sector. We have yet to see such an order.

Also, it comes just as publicly-traded quantum stocks are about a week into a nosedive that followed an unprecedented surge in their values that was boosted in part by the expectation of the EO.

The WSJ report is attributed to unnamed sources, leaving one to wonder how much of it is based on sources affiliated with those particular companies, or maybe investors in them. Is this wishful thinking? It has a whiff of that, though if an EO is being prepared, Trump reps probably would be reaching out to different companies in the sector to help shape some of the details. Also, wishful thinking always comes with a disclaimer: Be careful what you wish for.

(UPDATE: A Reuters report casts doubt on the possibility that the US Department of Commerce is negotiating with the companies named in the WSJ story.)

It’s also interesting that only pure-play quantum start-ups, and not quantum’s largest players–IBM, Microsoft, Google, Honeywell (through its majority ownership of Quantinuum, a pioneer in the quantum-safe security tech that has been identified as increasingly important to national security)–are named in the report. There is not a US Steel or Intel equivalent, although this was also the case in the rare earth sector. A $10 million investment would be a drop in the bucket for many companies, even some of the quantum start-ups, so the amount identified in the WSJ reports also raises questions.

On the other hand, as so many have pointed out, the most unlikely scenarios–and even the most unthinkable ones–have come to fruition in the past 10 months or so. This could be the natural next step for an administration that has a track record of trading government help for equity stakes in companies.

Also worth noting, some quantum companies talked in the past of their desire to pursue CHIPS Act assistance, so this could be an evolution of desires and plans that started during the Biden administration. The Trump administration has a different mindset, of course, about government funding help as a trade for equity. Many quantum firms already are working with various government agencies and military branches through services contracts, and that is yet another possible channel for increasing financial support for these firms.

Whether the government directly funds one quantum company or 10, or ultimately decides not to buy into any of them, the decision will once again shake up a sector that has been on a roller coaster ride this year even as it continues to deliver technology and business breakthroughs.

One last thing to think about: The funding for Intel came with statements that the federal government would not have the same kind of “golden share” it has in US Steel, meaning the Intel stake does not come with voting rights or strategic influence. What kind of stakes would Trump want in quantum companies, and what could that mean for the future of small, young companies working on technology that could be used to protect national security, as well as threaten the security of other nations?

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Quantum News Nexus is a new site from freelance writer and editor Dan O’Shea that covers quantum computing, quantum sensing, quantum networking, quantum-safe security, and more. You can find him on X @QuantumNewsGuy and doshea14@gmail.com.