Trump eyes government control of quantum computing firms with Intel-like deals

Donald Trump is eyeing taking equity stakes in quantum computing firms in exchange for federal funding, The Wall Street Journal reported.

At least five companies are weighing whether allowing the government to become a shareholder would be worth it to snag funding that the Trump administration has “earmarked for promising technology companies,” sources familiar with the potential deals told the WSJ.

IonQ, Rigetti Computing, and D-Wave Quantum are currently in talks with the government over potential funding agreements, with minimum awards of $10 million each, some sources said. Quantum Computing Inc. and Atom Computing are reportedly “considering similar arrangements,” as are other companies in the sector, which is viewed as critical for scientific advancements and next-generation technologies.

No deals have been completed yet, sources said, and terms could change as quantum-computing firms weigh the potential risks of government influence over their operations.

Quantum-computing exec called deals “exciting”

In August, Intel agreed to give the US a 10 percent stake in the company, then admitted to shareholders that “it is difficult to foresee all the potential consequences” of the unusual arrangement. If the deal goes through, the US would become Intel’s largest shareholder, the WSJ noted, potentially influencing major decisions that could prompt layoffs or restrict business in certain foreign markets.

“Among other things, there could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments, or competitors,” Intel wrote in a securities filing. “There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company.”

But quantum computing companies that are closest to entering deals appear optimistic about possible government involvement.

Quantum Computing Inc. chief executive Yuping Huang told the WSJ that “the government’s potential equity stakes in companies in the industry are exciting.” The funding could be one of “the first significant signs of support for the sector from Washington,” the WSJ noted, potentially paving the way for breakthroughs such as Google’s recent demonstration of a quantum algorithm running 13,000 times faster than a supercomputer.

Allison Schwartz, D-Wave’s head of government relations, suggested the funding opportunity aligned with the firm’s goals.

“The company wants to sell systems that can solve the government’s hard problems and get a return on investment,” Schwartz told the WSJ.

The other firms did not indicate how strong their interest is at this point. Rigetti’s spokesperson told the WSJ that the firm is “continuously engaging with the government on funding opportunities,” and Atom Computing and IonQ declined to comment.

Trump’s increasing interventions in US tech firms considered vital to the US economy and national security lack meaningful precedent, so some companies may be hesitant to strike deals.

During the 2008 financial crisis, the US temporarily took stakes in key companies considered vital to the economy that risked going under, but Trump isn’t targeting struggling companies. Instead, he and Commerce Secretary Howard Lutnick are hoping to convince key tech firms that the “government should share in a company’s upside since taxpayer money provides financial support and a stamp of approval,” the WSJ reported.

It’s their plan to take the CHIPS funding that Biden gave away “for free” and turn it into “equity for the Trump administration” and “for the American people,” Lutnick has said.

The administration will lean on Deputy Commerce Secretary Paul Dabbar to extend Trump’s industry meddling into the quantum computing world, the WSJ reported.

A former Energy Department official, Dabbar co-founded Bohr Quantum Technology, which specializes in quantum networking systems that the DOE expects will help “create new opportunities for scientific discovery.” While the firm he previously headed won’t be eligible for funding, Dabbar will be leading industry discussions, the WSJ reported, likely hyping Trump’s deals as a necessary boon to ensure US firms dominate in quantum computing.