U.S. Government Considers Stakes in Quantum Computing Firms; Post-Market Surge Sees QBTS Soar 17%

TradingKey - The Trump administration is reportedly in talks to acquire stakes in quantum computing companies, according to The Wall Street Journal. On Wednesday, U.S. quantum computing stocks rallied post-market, with QBTS jumping over 17%, QUBT over 12%, and RGTI climbing over 16%.

Insiders reveal that companies such as IonQ (IONQ), Rigetti Computing (RGTI), and D-Wave Quantum (QBTS) are negotiating potential government equity stakes in exchange for special funding. Others like Quantum Computing (QUBT) and Atom Computing (ATOM) are contemplating similar deals, targeting at least $10 million in support from the U.S. government.

This marks a novel approach by the U.S. government in acquiring corporate stakes. In August, the administration invested in Intel through a “subsidy-for-equity” strategy, using $8.9 billion in federal grants to acquire nearly 10% of the company’s shares, becoming its largest shareholder. Previously, the Department of Defense took a stake in rare earth miner MP Materials, and the Department of Energy in lithium miner Lithium Americas.

Analysts view the government's interest in quantum computing as a crucial endorsement of this sector, seen as a key next-generation technology capable of performing calculations in seconds that would take current computers millennia. This technology could potentially enhance economic efficiency across various industries.

Aside from government interest, tech giants like IBM and Microsoft are also investing in quantum computing.

However, quantum computing stocks faced a sell-off during Wednesday’s session following Google’s announcement of major advancements with its Willow quantum chip. Analysts suggest this represents a significant challenge for startups like QBTS, as Google’s breakthrough could shift competitive dynamics in the market.

In the long term, though, substantial technological progress is expected to benefit the entire industry. Google claims its Willow quantum chip ran an algorithm called “Quantum Echoes,” outperforming traditional supercomputers with speeds 13,000 times faster than the world’s strongest supercomputer.

Google asserts this breakthrough paves the way for practical applications of quantum technology within five years, potentially accelerating developments in drug discovery and materials science.