Government Intervention

This report highlights increasing government influence in the U.S. economy, exemplified by Trump’s pardon of Binance’s founder and the government’s equity stake in Intel. These actions raise concerns about potential conflicts of interest, market distortion, and fair competition. Trade tensions with Canada have escalated, while China expresses a conciliatory tone ahead of a potential Trump-Xi meeting. U.S. stocks are up, driven by tech, and dividend stocks are gaining appeal as interest rates are projected to decline.

Reports of imminent government equity stakes in quantum computing companies like IonQ, Rigetti, and D-Wave have spurred market speculation, though the Commerce Department downplays immediate acquisitions. While acknowledging ongoing funding discussions, particularly regarding national security, companies remain mostly silent. Potential support contrasts with recent semiconductor deals, as quantum firms lack substantial revenue and face intense competition from hyperscalers like Google and IBM. The structure of government intervention, balancing national security needs with taxpayer risk and private investment, remains critical.

A UK government report warns of a “once-in-20-years opportunity” to build a world-class AI chip design industry. Failure to invest risks the UK becoming a consumer, not a creator, of this critical technology. The report emphasizes that focusing on design, not manufacturing, is crucial, requiring skilled designers and coordinated government action. A severe skills shortage must be addressed through education and strategic investment, particularly in areas like optoelectronics. Affordable access to design tools and collaboration between government departments are also vital.