US to invest in IBM, other quantum computing firms

The Trump administration will take US$2 billion ($2.8 billion) in equity stakes across ⁠nine quantum-computing ⁠companies, including a new IBM venture, in a major push to secure US leadership in the emerging technology and counter China.

The move shows the growing prominence of quantum computing, where recent technological breakthroughs have deepened investor interest in its potential to speed up tasks ranging from drug discovery to financial modelling and ‌cryptography.

The US Department of Commerce said that IBM would receive US$1 billion ‌to ‌set up a company to manufacture quantum chips, while contract chipmaker GlobalFoundries will ‌get US$375 million to build a US factory producing components for different types ⁠of quantum machines.

IBM said the new company, Anderon, will be based in New Albany, New York, and become America's first dedicated quantum chip manufacturing facility. It did not disclose the government's stake in the new company.

IBM CEO Arvind Krishna told Reuters the new firm would offer its chipmaking technology to outside customers ​and was already in talks with potential clients.

"They're going to get the exact same capability that we have for ourselves," Krishna said.

Other firms including D-Wave, Rigetti Computing and Infleqtion will get ⁠about US$100 million each, while Diraq will receive up to US$38 million to tackle key technical hurdles holding back more powerful systems, the Commerce Department added.

Two of the recipients have ties to the administration. Emil Michael, the Pentagon's top technology official, took D-Wave public in 2022 through a blank-check firm he was heading at the time. PsiQuantum last year raised US$1 billion from investors including Nvidia's venture capital arm and Donald Trump Jr.-backed 1789 Capital.

The funding, drawn from incentives under the CHIPS and Science Act signed by former President Joe Biden, is the latest example of Washington taking equity ​positions in strategic industries to shore up supply chains and compete ⁠with China.

Last year, the government converted some CHIPS Act grants as well as ⁠unpaid federal incentives into a 10 percent stake in Intel that made it the chipmaker's largest shareholder. It has also taken a big stake in ​MP Materials, a rare-earth mining company.

"These strategic quantum technology investments will build on our domestic industry, creating thousands of ‌high-paying American jobs while ⁠advancing American quantum capabilities,” Secretary of Commerce Howard Lutnick said.

Quantum computing has drawn growing investor interest after recent advances, but major technical challenges remain, including high error rates that limit practical performance.

IBM will make a contribution of US$1 billion to Anderon. It will ‌also give intellectual property, assets and workforce to Anderon and bring in additional investors as the new company grows.

GlobalFoundries, in which the US government is taking an equity stake of about 1%, said it has launched a new business called Quantum Technology Solutions focused on scaling manufacturing for quantum-computing hardware.

Gregg Bartlett, chief technology officer ​of GlobalFoundries, told Reuters the company will work with multiple firms on control chips that can withstand ultra-low temperatures required for quantum computers, as well as advanced packaging technologies.

Matthew Kinsella, CEO of Infleqtion, told Reuters that the investments underscored the technology's growing potential.

"The government has proven ‌to not fund ⁠thus far technologies they would deem as speculative, ​and I believe that this investment really does further validate that quantum computing is coming much faster than anybody thinks," Kinsella said.

(Reporting by Harshita Mary Varghese ​and Aditya Soni in Bengaluru; Editing by Vijay Kishore, Anil D'Silva and Sanjeev Miglani)