Trump’s Quantum Stock Interest Sparks Surge

Washington has reportedly explored taking equity stakes in quantum-computing firms in exchange for federal funding, as initially reported by the Wall Street Journal on Wednesday. This potential move underscores the growing strategic importance of quantum computing and the U.S. government’s proactive approach to securing its leadership in this critical technology.

While the Commerce Department has since stated that it is “not currently negotiating equity stakes with quantum computing companies,” the initial report highlights a significant policy discussion within the administration regarding investment in emerging technologies.

The Journal’s report, citing anonymous sources, named companies including IonQ, Rigetti Computing, and D-Wave Quantum as potential candidates for such arrangements. Other firms such as Quantum Computing Inc. and Atom Computing were also mentioned as considering similar deals.

The report fueled market activity on Thursday, with shares of quantum computing firms experiencing notable gains. IonQ saw a jump of 6%, while D-Wave surged 13%. Rigetti added 6%, and Quantum Computing was up 5%. Arqit Quantum gained 8%.

The reported discussions are consistent with Washington’s recent trend of acquiring stakes in companies deemed crucial to U.S. national security, particularly those receiving public funding. This trend reflects an increasing awareness of the need to bolster domestic capabilities in strategic sectors.

One notable example is the Defense Department’s $400 million investment in MP Materials, an American rare earths company, which resulted in a 15% stake. This investment aimed to strengthen the domestic supply chain for rare earth elements, vital components in high-tech manufacturing.

Similarly, the government acquired a roughly 10% stake in Intel, the only U.S. company capable of producing advanced AI processors domestically. This move underscored the critical importance of semiconductor manufacturing to U.S. technological competitiveness.

The potential stakes in quantum computing companies would reportedly involve minimum funding awards of $10 million each, according to the Journal. A broader competition for these grants is expected to attract other technology companies as well. This injects needed capital into a still nascent field, helping to speed up timeline to comercial applications.

The U.S. government’s increasing willingness to take equity stakes in private companies represents a notable shift in strategy, particularly outside of periods of acute financial crisis. This indicates a growing appetite for intervention in sectors considered strategically important.

Treasury Secretary Scott Bessent emphasized the need for caution in an interview, stating, “We do have to be very careful not to overreach.” He clarified that the Trump administration would focus on strategic industries, avoiding investments in non-strategic areas.

Both President Trump and Commerce Secretary Howard Lutnick have argued that the government should benefit from the success of companies that have received federal funding. This rationale underscores the government’s interest in ensuring a return on its investments in strategic sectors.

The selection of targeted industries reflects Washington’s focus on technological and economic competition with China. This competition is a driving force behind the government’s efforts to support domestic industries and secure its leadership in key technologies.

The U.S. stake in MP Materials, for instance, was a response to China’s restrictions on rare earth exports. By investing in MP Materials, Washington aimed to reduce its dependence on foreign sources of these critical minerals.

Similarly, the funding for Intel aligns with U.S. efforts to strengthen its domestic semiconductor industry and maintain its edge in artificial intelligence; quantum computing, which harnesses the power of quantum mechanics to solve problems beyond the reach of conventional supercomputers, stands out as a particularly significant technology for Washington’s attention.

Its transformative potential could revolutionize fields like medicine, finance, and materials science by enabling solutions to currently intractable problems; however, it also presents potential cybersecurity risks.

If it falls into the wrong hands, it could be used to break existing encryption methods, leading to unprecedented breaches of data security. This dual-use nature of quantum computing makes it a high-stakes arena in the tech and security landscape. Securing domestic leadership in this technology is, therefore, not just about economic advantage, but also about safeguarding national security interests.