Quantum computing is a compelling argument for targeted U.S. industrial policy, but broader government investments in tech companies require clear regulations. This conclusion comes from columnists Joshua Zoffer and Chris Miller at The Economist.
The authors argue that in other areas like drones, batteries, or rare earth recycling, the government can support the market through procurement, regulation, or assistance to allied suppliers. However, the situation is different in quantum computing: there are currently few commercial products, no dominant architecture, and supply chains have yet to form. Therefore, early government intervention, according to Zoffer and Miller, may be justified before dependencies become entrenched.
The columnists linked quantum technologies to national security: scalable quantum computers could threaten public key cryptography, and related developments are applicable in sensors, navigation, communications, and scientific calculations. They described this sector as a rare case where direct government investment may be warranted, but emphasized that such support should not become a universal model.
How the U.S. Commerce Department's Program Works
On May 21, the U.S. Department of Commerce announced the signing of nine letters of intent totaling $2.013 billion under the CHIPS and Science Act. The funds are intended for two quantum factories and seven companies developing quantum computing.
One recipient is IBM, which will receive $1 billion to create a subsidiary for producing quantum-class superconducting wafers. GlobalFoundries is set to receive $375 million for a secure quantum factory focused on various approaches to quantum computing.
The list also includes:
- Atom Computing ($100 million);
- D-Wave ($100 million);
- Infleqtion ($100 million);
- PsiQuantum ($100 million);
- Quantinuum ($100 million);
- Rigetti (up to $100 million);
- Diraq (up to $38 million).
A condition for support is a minority non-controlling stake for the government in each company. This requirement did not sit well with Google, which opted out of the program, believing that the stipulations could hinder progress toward creating a useful quantum computer.
Three Principles for Government Investments
Zoffer and Miller proposed three principles for direct government investments in tech companies:
- Intervene only when there is a clear need for national security or a significant economic vulnerability that the market will not address on its own.
- Do not invest where a ready-made product is available. In the case of quantum computing, this approach does not currently apply, as the necessary products do not yet exist in a commercial form.
- Support should maintain a distance between government and business. The authors believe taxpayers should benefit if supported companies grow, but direct ownership of shares creates political risks.
They suggested using warrants as a tool. This mechanism could give the government the right to participate in the growth of company value without full control over them.
Previously, former President Donald Trump signed an executive order for the accelerated transition of federal systems to post-quantum cryptography. Along with accompanying informational bulletins, the documents outline a strategy aimed at protecting the country from advanced cryptographic attacks while simultaneously fostering commercial and scientific innovations.
Experts supported this direction but warned that the issue is more complex for Bitcoin, as a decentralized network cannot be updated by government decree.
In June, the U.S. Department of Defense's Defense Innovation Unit launched the Farseer program to develop quantum sensors and portable atomic clocks for intelligence, surveillance, and reconnaissance. The initiative could receive up to $200 million over the next year.