The US government will soon own a portion of a quantum computing foundry inside a facility in New Albany, New York, a small city on the Hudson River about twenty miles south of Albany, where a former IBM manufacturing complex is being converted for a completely different era of computing. Not via a contract for defense. Not through a research grant that vanishes into the budget of the university. via equity.
Depending on who you ask in the defense and technology communities, the Department of Commerce’s deployment of $2.01 billion from the CHIPS Act across nine quantum computing firms has structured a significant portion of its investment as direct minority shareholding. This is a departure from the standard subsidy model that is either a sensible evolution of industrial policy or a truly unusual thing for Washington to be doing. Reasonable arguments are made by both sides.
The quantities indicate a hierarchy that is likely more concerned with commercial preparedness than with technological promise, and the allocations are organized around the particular technical strategies that various businesses are attempting to achieve utility-scale quantum computing. The largest cheque, $1 billion, goes to IBM, which will match it in order to establish Anderon, a specialized quantum foundry subsidiary in New Albany. This practically amounts to a $2 billion federal investment in just one plant. The government invests about 1% of GlobalFoundries’ $375 million to develop Quantum Technology Solutions and create domestic production for quantum hardware components.
Amounts ranging from $38 million to $100 million are given to seven other firms, including D-Wave, Rigetti, Infleqtion, Quantinuum, Atom Computing, PsiQuantum, and Diraq. These companies deal with superconducting, trapped-ion, annealing, neutral atom, and silicon spin qubit methods. The dispersion among modalities is intentional. No one in Washington or the quantum research community is positive which architecture will produce useful scale first, and the only way to avoid making a mistake is to place bets across the landscape.
Since the supply chain is most vulnerable at the hardware chokepoints that the money is aimed at, this initiative becomes truly intriguing from an industrial policy standpoint. Currently, a few firms, primarily in Europe, provide cryogenic systems that cool quantum processors to almost absolute zero.
Since the semiconductor crisis of 2021 made everyone aware of what happens when a critical technology lacks domestic manufacturing depth, Washington has been examining supply chains that are similarly concentrated in photonic components, control electronics, and the specialized wafers required for specific types of qubits. The goal of the quantum investment is to ensure that the next generation of strategic computing infrastructure does not have the same single points of failure that caused the chip shortage to be so detrimental, in addition to focusing on quantum computers.
The aspect of this announcement that has generated the widest range of responses is the equity model. While the federal government’s acquisition of equity positions in banks and automakers during the 2008 financial crisis is not unprecedented, it is unusual enough in a non-crisis, peacetime setting to raise serious concerns about exit strategy, governance, and what happens if these businesses fail or are purchased by foreign buyers.
The most tangible illustration of the equity link is the officially disclosed 1% investment in GlobalFoundries. The equity conditions for the other businesses seem to differ and are sometimes still being worked out. It’s possible that the approach functions precisely as planned: taxpayers finance the creation of a strategic technology and profit from the companies’ success. Additionally, overseeing minority investments in nine pre-commercial quantum firms may result in more bureaucratic complication than financial gain.
As investors assimilated the implication that the sector’s near-term financing prospects had been considerably de-risked by federal backing, publicly traded quantum computing businesses saw notable price rises in response to the announcement.
D-Wave, Rigetti, and IonQ all reacted strongly to the news, serving as a reminder that government-backed runway extension is crucial for businesses hoping to survive long enough to determine whether their specific strategy for creating qubits proves to be the best one in a field where the road to commercialization is still measured in years. There is a sense that American industrial policy has entered a phase that would have seemed impossible to characterize even five years ago, as one watches Washington take equity positions in that wager.
