Congress Eyes Boosting Quantum Funds as Global Race Heats Up

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(Bloomberg) — US lawmakers from both parties are seeking to boost federal funding for quantum computing as China and other countries race to transition from research to deployment of the nascent technology across defense, intelligence and cybersecurity.

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The House later this year is expected to debate defense funding legislation that would increase annual military spending on quantum development and application by 68% to $567 million. A similar effort is underway in the Senate to fund the nascent technology, which researchers believe could provide a range of new capabilities in everything from drug discovery to computing encryption standards. 

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The congressional moves buttress work within the Trump administration, which in May announced plans to pour more than $2 billion into the industry through direct federal investments. In June, President Donald Trump signed an executive order aimed at advancing quantum research and development and another mandating federal agencies take steps to insulate their IT systems against quantum computer-based cyberattacks. 

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Despite a slate of recent technological breakthroughs, investors remain skeptical of the industry’s near-term commercial success, according to Philip Singerman, senior adviser at the Center for Strategic and International Studies. 

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Shares of leading pure-play quantum companies including D-Wave Quantum Inc., Infleqtion Inc. and Rigetti Computing Inc. have fallen sharply since the start of the year as investor enthusiasm for the technology, which had been hailed by analysts as the next market-defining computing revolution after artificial intelligence, has cooled. Global X’s AI and Technology ETF, which holds a basket of top AI and semiconductor stocks, has risen 20% over the same period.

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Another quantum company, College Park, Maryland-based IonQ Inc., last week closed its $1.8 billion acquisition of semiconductor foundry SkyWater Technology Inc. after federal regulators ended their review of the deal without taking any action to stop it. IonQ on Wednesday raised its full-year revenue forecast, and its shares have recouped most of their losses for the year.

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Nonetheless, funding quantum has quickly become a political priority as governments line up financing in the race for superiority on a technology that ultimately could pose security threats, breaking the systems that protect banks and government data.

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A mix of startups and large firms, including Microsoft Corp. and Alphabet Inc.’s Google, are trying to apply quantum physics to make computers exponentially more powerful than today’s machines. These companies are betting that the nascent field, which uses the rules of subatomic particles to manipulate and transmit information, is getting closer to delivering real-world progress in fields like drug discovery and finance.

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There’s also the race against China, which has established a $10 billion National Laboratory for Quantum Information Sciences, while Europe and the UK combined have committed nearly three times as much public money as the US to develop the technology, according to estimates compiled by industry consultancy QBN.