It’s a good day to be an American quantum computing company—well, as long as you’re willing to give up some equity.
Nine major firms are splitting $2 billion in grants from the Trump administration, the Wall Street Journal reports. In return, the government will take varying equity stakes in each of the companies.
IBM will receive half the award, putting it toward a new IBM company called Anderon. IBM will match the grant with another $1 billion in cash for the Albany, New York-based standalone company.
It’s an investment that IBM predicts will pay off in spades.
“Anderon will operate as a state-of-the-art 300-millimeter quantum wafer foundry,” IBM stated in an announcement. “It will help the nation solidify its leadership at the center of a thriving new quantum industry that is estimated to generate up to $850 billion in economic value by 2040 and spur American economic growth while also bolstering national security.”
Alongside IBM, GlobalFoundries is set to receive $375 million from the grant, while companies such as D-Wave Quantum, Inc., Infleqtion Inc., and Rigetti Computing Inc. should get $100 million each.
Diraq, a private startup, is expected to receive $38 million.
The final deals are still being confirmed and multiple announcements state the funds are contingent on meeting certain milestones.
Fast Company has reached out to the Commerce Department for comment. We will update this post if we hear back.
Shares of publicly traded companies involved were up in Thursday’s premarket.
As of publication, IBM (NYSE: IBM) is up about 6.6%, D-Wave (NYSE: QBTS) is up about 17.5%, and Rigetti (Nasdaq: RGTI) is up about 15.5%.
Meanwhile, Global Foundries (Nasdaq: GFS) rose about 14.5% and Infleqtion (NYSE: INFQ) jumped about 24%.
The government wants a stake in quantum computing companies
It’s critical to highlight that these grants are being supplied by the Biden-era 2022 Chips and Science Act.
It provided $280 billion in funding for semiconductors—a critical part of quantum computing—over the next decade, and votes against it came from 187 House Republicans and 32 Senate Republicans.
Last year, Trump used his joint address to Congress as a platform to rally against the legislation. “Your CHIPS Act is a horrible, horrible thing,” Trump told Congress, according to Politico.
Directing his remarks at Speaker Mike Johnson, he continued: You should get rid of the CHIP[S] Act and whatever’s left over Mr. Speaker, you should use it to reduce debt or any other reason you want to.”
Now, despite the Chips and Science Act devoting money toward advancement, the Trump administration is making these grants contingent on receiving stakes in the quantum computing companies.
Yes, as part of the award, the Trump administration is continuing its unusual practice of taking equity in major companies. Notably, the government took a 10% stake in Intel last year.
D-Wave and Infleqtion plan to offer $100 million worth of common stock to the Commerce Department—with Infleqtion proposing a 15% discount on market pricing.
