Tad DeHaven
The Trump administration’s government ownership spree has officially gone quantum.
The Commerce Department announced today that it has signed letters of intent to provide roughly $2 billion in federal incentives under the CHIPS and Science Act to nine quantum-computing companies. In return, the federal government will receive minority equity stakes in each company.
The largest recipient is IBM, which is slated to receive $1 billion to establish a new quantum foundry subsidiary. GlobalFoundries is to get $375 million. The rest would receive $100 million each, with Diraq receiving up to $38 million.
The full terms of these deals are currently unknown, but investors got the message immediately. Publicly traded recipients surged on the news, with D‑Wave, Rigetti, and Infleqtion all up roughly 25 to 33 percent as of this afternoon. At the same time, IBM and GlobalFoundries also posted unusually large gains. Even IonQ, a leading quantum company left off the initial award list, rose about 10 percent as investors digested the sector-wide implications. That may be because Commerce’s release noted that the government “continues to solicit proposals from eligible applicants.”
Their stock price jumped because the administration put its thumb on the scale. Federal intervention thus immediately boosted the market value of selected firms, while signaling to competitors that success now depends in part on winning favor from the administration. And that’s a fundamental problem with government ownership—it tells investors, customers, and suppliers that these firms are now squarely inside the administration’s favored circle.
Defenders will say quantum computing is strategically important and that cutting-edge technology is capital-intensive. That may be true, but neither point justifies the administration’s venture capitalist cosplay.
Nor does this look like an industry that private investors have ignored. The Quantum Economic Development Consortium reports that US-headquartered companies raised more than $2.7 billion in venture capital in 2025, about $1 billion more than in 2024. Several of the firms receiving federal equity deals have also attracted substantial private capital. PsiQuantum raised $1 billion last year. Quantinuum raised roughly $600 million at a $10 billion pre-money valuation. Infleqtion raised $100 million.
Globally, governments are throwing public money at the sector. Still, as the artificial intelligence investment boom shows, America’s capital markets are more than capable of financing promising technologies without the federal government becoming a shareholder.
Then there is IBM, which isn’t some fragile startup. In its 2025 annual report, IBM reported $67.5 billion in revenue, $14.7 billion in free cash flow, and more than $8.3 billion in research and development spending. Yet IBM is now in line for $1 billion from taxpayers, with an equity stake attached.
If IBM needs taxpayer capital, who doesn’t?
The administration wants the debate to focus on “taxpayer upside.” That’s the sales pitch Commerce Secretary Howard Lutnick has used repeatedly as the administration’s ownership acquisitions have expanded from Intel to critical minerals to, now, quantum computing. Why should taxpayers only subsidize companies, he asks, when they can share in the upside?
Well, Mr. Secretary, the federal budget isn’t a mutual fund, and the president is not a portfolio manager, regardless of how he may fancy himself. A potential gain on some stocks will not rescue the federal budget, as the deficit is projected to reach $2 trillion this year under Trump’s watch. More importantly, government equity stakes distort competition, politicize investment, and give government officials incentives to protect favored firms if they stumble.
The political-network angle makes the problem even clearer. The Financial Times notes that PsiQuantum raised funding from investors that include 1789 Capital, the venture capital firm where Donald Trump Jr. is a partner. The same firm also backed Vulcan Elements, the rare-earth magnet startup that, as I wrote in March, received a Commerce Department equity deal and later Defense Department financing. The FT also notes that D‑Wave went public in 2022 under Emil Michael, now a top Pentagon official.
Former Intel CEO Pat Gelsinger is another useful guide on where this has been heading. Last year, I noted that Gelsinger was calling for a US sovereign wealth fund to invest in strategic technologies, including quantum computing. Gelsinger is now a general partner at Playground Global, whose portfolio includes PsiQuantum. He also became executive chair of xLight, another Playground company. In December, Commerce announced a letter of intent to provide up to $150 million in CHIPS subsidies to xLight, with Commerce receiving $150 million of equity.
NO one has to allege a conspiracy to see the pattern.
This began with Trump’s desire for a sovereign wealth fund early in his second term. As I argued last year, once it became clear that a real sovereign wealth fund would require Congress and legal constraints, the administration began improvising one through deals, shakedowns, equity stakes, warrants, and revenue-sharing arrangements. I later warned that the administration was assembling a pseudo-investment fund under executive-branch control. The latest quantum announcement shows that the portfolio is still growing.
This also reflects the administration’s constant search for presidentially controlled pools of money. In a post yesterday with Molly Nixon, I explained why Trump’s anti-weaponization fund is another attempt to create a slush fund, this time through a legal settlement. The context is different, but the instinct is the same: find money, put it under presidential discretion, and dress it up as justice, national security, taxpayer upside, or whatever makes for useful window dressing.
Today’s quantum deals are the latest installment in an improvised project to convert federal power into presidential leverage over private enterprise. It’s antithetical to American capitalism, which, like it or not, is the driver of American prosperity. It’s also government ownership by press release, building a patronage market in real time.