Shares in quantum computing companies surged on Thursday following reports that the Trump administration is engaged in discussions aimed at acquiring equity stakes in these firms in exchange for federal funding. Companies such as IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing are reportedly among those in negotiations, leading to a notable increase in their stock prices.
The Wall Street Journal highlighted that these discussions reflect a hands-on approach by President Trump’s administration to intervene in publicly traded companies, a practice characterized as “state capitalism” or “national capitalism.” The administration is allegedly promising federal funding to select quantum computing firms, contingent on them granting equity stakes to the Commerce Department. Shares of these companies rose between 5% and 14% in response, while the Defiance Quantum ETF, which invests in a range of firms within the sector, experienced a 2% increase.
Investors are now eagerly waiting for more information on these developments. The White House, the Commerce Department, and D-Wave Quantum have not provided comments regarding the reports, and representatives from IonQ and Quantum Computing have declined to discuss rumors or speculation. A spokesperson from Rigetti stated the company is “continuously engaging with the U.S. government on funding opportunities.”
This development holds significant implications for investors who are gravitating towards emerging technologies in an effort to capitalize on anticipated government backing. However, experts advise caution, as the reports remain unconfirmed and the stocks in question are already known for their volatility.
Quantum computing is regarded as a transformative technology, promising faster and more complex problem-solving capabilities compared to traditional computers. This perception has contributed to sharp price fluctuations among quantum computing stocks, even prior to the recent reports.
The Trump administration has made investing in publicly traded companies a hallmark of its economic strategy, and quantum technology represents a new frontier in this approach. Previous investments have included stakes in chipmakers, rare earth minerals, and manufacturing giants like Nippon Steel. While some market observers and policymakers commend governmental involvement in vital sectors, others express concerns that such initiatives may lead to inefficient market dynamics, effectively allowing the government to “pick winners and losers.”
Following a government acquisition of a 10% stake in Intel, Commerce Secretary Howard Lutnick characterized the transaction as “fair to the American people,” highlighting the administration’s rationale behind its interventionist policies. In a striking demonstration of his engagement with these investments, President Trump even shared an image showcasing his trading of Intel stock from the White House, illustrating the stock’s gains after the government’s involvement.
Nonetheless, critics argue that such state-level interference could undermine market principles, raising ethical questions about the appropriateness of the government choosing which companies to support financially.
