The U.S. government is considering a strategic move to diversify its investment portfolio by venturing into the burgeoning field of quantum computing. Recent reports from The Wall Street Journal indicate that at least five quantum computing funds are currently in various stages of discussions regarding potential equity exchanges for federal funding. This initiative comes just two months after the government acquired a 10% equity stake in Intel and slightly over three months after the Pentagon secured a 15% stake in the largest rare earths miner in the U.S.
Among the companies involved in these discussions are IonQ, Rigetti Computing, and D-Wave Quantum, all of which are reportedly considering adding the government as a shareholder. Other firms, such as Quantum Computing Inc. and Atom Computing, are also exploring similar arrangements. The financial investments are expected to begin at $10 million, which is significantly lower than the $9 billion in grants that Intel received, subsequently converted to equity.
The stock market has responded positively to this news, with shares of IonQ and D-Wave experiencing a 9% increase in pre-market trading on Thursday. Rigetti's stock saw a 7% rise, while Quantum Computing shares surged by 11%. If finalized, these investments would mark the government's inaugural foray into the quantum computing sector, a domain that has been likened to artificial intelligence for its potential to revolutionize societal norms.
Quantum computing technology promises to enable computers to process information exponentially faster than current systems, allowing for complex simulations and calculations to be completed in a fraction of the time. In a note to investors, Bank of America expressed optimism about the future of quantum computing, suggesting it may rank as the most significant revolution for humanity since the discovery of fire. The capability of performing intricate calculations almost instantaneously could dramatically accelerate human knowledge and development.
Despite the excitement surrounding this technology, experts caution that quantum computing is still in its infancy. Companies engaged in the development of quantum prototypes, including tech giant Google, do not anticipate delivering a functional quantum computer until the end of the decade. Moreover, many industry leaders predict it could take an additional ten years before breakthroughs suitable for commercial applications are realized.
As of now, no investment agreements have been finalized with the previous Trump administration, and there have been no firm commitments or defined terms regarding potential investments. However, by acquiring equity stakes in these innovative companies, the government could gain increased influence over the rollout of quantum technology and the associated financial benefits, should these companies experience significant stock price appreciation.
