With quantum risk comes quantum reward

The US government is taking a quantum leap of faith.

Quantum computing companies soared today after the Trump administration announced it’s offering $2 billion worth of grants to nine companies. The deals involve the US government taking equity stakes in the firms, similar to the strategy it has used to invest in critical minerals infrastructure.

The largest chunk of money is going to IBM, which surged 12.48% today. The US Commerce Department is awarding the firm $1 billion, which will be used to create an entirely new company called Anderon that will build and operate the first US-based “purpose-built” quantum foundry, according to IBM.

Other firms included in the deal shot up:

• Chipmaker GlobalFoundries surged 14.92% on the news that the US government is taking a 1% stake in the company, as well as awarding it $375 million in funding.
• D-Wave Quantum, Rigetti Computing, and Infleqtion are all receiving $100 million in funding. D-Wave popped 33.54%, Rigetti jumped 30.57%, and Infleqtion surged 31.48%.
• Atom Computing, PsiQuantum, Quantinuum are each receiving $100 million, but are private.
• Diraq, a privately owned startup, is receiving a measly $38 million.

The US government will take minority stakes in all of the firms mentioned, but hasn’t disclosed the exact amount, according to the Wall Street Journal.

The big deal: Quantum computers process information using quantum bits, and in their final form, quantum computers could do tasks exponentially faster than today’s most powerful supercomputers. Similar to the AI arms race, the US government sees being the first to implement the tech as a national security concern. According to McKinsey, quantum computing could deliver about $1.3 to $2.7 trillion of economic value by 2035.

Quantum expectations

Despite the fact that 99.9% of people couldn’t tell you the difference between a bit and a qubit, many scientists, analysts, and investors all agree quantum computing is a BFD. But the actual technology is still very much in its infancy, and some worry that the industry is too nascent to be calling winners just yet.

Last year, Nvidia CEO Jensen Huang said that “very useful” quantum computers could still be decades away. Google CEO Sundar Pichai also said last year that the technology was still nascent, and 5 to 10 years away from being useful.

“The quantum moment reminds me of where AI was in the 2010s, when we were working on Google Brain and the early progress,” Pichai said at a conference last year. And a source in the government told the WSJ that the number of deals hedges risk if not every company takes off or pans out over the years.

Time for those qubits—whatever they are—to get to work.—LB