Trump administration to invest in quantum computing companies? US Department of Commerce official: No such consultations
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Less than a day after reports emerged that the Trump administration was negotiating to take stakes in quantum computing companies, the U.S. Department of Commerce denied it.
On Thursday, 23rd Eastern time, near the end of the morning U.S. stock session, a spokesperson for the U.S. Department of Commerce told the media: "The Department is not currently in negotiations with quantum computing companies regarding equity stakes."
At the beginning of the afternoon session, another media outlet mentioned the statement from the Department of Commerce, in which an official gave an identical denial. The report said the official stated that the U.S. government is not currently discussing exchanging equity for government funds with quantum computing companies.
This denial by the Commerce Department was in response to a media report earlier on Thursday. Wallstreetcn mentioned that according to the report, the Trump administration was in talks with companies such as IonQ, Rigetti Computing, and D-Wave Quantum, discussing the possibility of the government becoming a shareholder in exchange for providing federal funds. The report said that the minimum investment discussed was $10 million per company.
After this news came out during the Asian trading session on Thursday, the shares of several quantum computing companies soared at the start of the U.S. market. D-Wave Quantum (QBTS) jumped nearly 22.5%, Rigetti Computing (RGTI) rose more than 16%, IonQ (IONQ) gained more than 13%, and Quantum Computing (QUBT) surged close to 14%. By midday, QBTS held on to gains of more than 10%, with the other three narrowing to under 10%.
Discrepancy Between Media Reports and Government Statements
From the reports during Thursday's U.S. trading session, taking stakes in quantum computing companies is not necessarily an option the Trump administration is considering.
The media reported that a spokesperson for the Department of Commerce revealed that related companies had contacted the White House, and the government had received many expressions of interest regarding equity investments. But President Trump wants to ensure a good return for taxpayers, and any investment would use surplus funds from the reforms that the current administration made to the funds committed by the Biden administration's CHIPS Act.
The spokesperson pointed out that what is being considered may be in the form of warrants or loans, and does not necessarily involve the companies mentioned in the earlier Thursday report.
The reason these companies proposed equity investments to the White House is that the federal government previously obtained a 10% stake in Intel, and gained so-called "golden share" privileges in the Japan Nippon Steel's acquisition of U.S. Steel. This year, the U.S. Department of Defense also agreed to take equity in rare earths miner MP Materials and metals miner Trilogy Metals, and the Department of Energy will acquire equity in Lithium Americas and its Thacker Pass lithium project.
The earlier report on Thursday said that the discussions about taking stakes in quantum computing companies were led by Commerce Department Undersecretary Paul Dabbar. Dabbar was once an executive at a quantum computing company and an official at the Department of Energy. A Commerce Department official said that Bohr Quantum Technology, the company Dabbar co-founded and served as CEO for four years, was not a candidate for funding.
Quantum Computing as a Strategic Competition Focus
The U.S. government has already regarded quantum computing as a key industrial sector, similar to rare earth minerals. In December 2018, Trump signed the National Quantum Initiative Act, committing $1.2 billion of federal funding to quantum research.
Quantum computers are viewed as the next-generation technology after artificial intelligence, as they are capable of performing calculations in a short time that would take current computers a very long time. The technology could boost efficiency and facilitate the identification of new drugs, materials, and chemicals.
Global tech giants are fiercely competing in this area. From IBM to Microsoft, all are investing in quantum computing, and China is also making efforts in this field. On Wednesday, Google announced its quantum computer runs 13,000 times faster than a classical supercomputer and may accelerate drug discovery and materials science research.
Many companies have shown interest in potential government funding. Yuping Huang, CEO of Quantum Computing, said the prospect of the government taking equity stakes in the industry is exciting. A Rigetti spokesperson said the company continues to engage with the government regarding funding opportunities. Allison Schwartz, government relations director at D-Wave, said the company hopes to sell systems that address government challenges and receive investment returns. Atom Computing and IonQ declined to comment.
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