Three quantum computing firms are receiving CHIPS Act funding from the U.S. government in return for giving up minority ownership positions. The investors appear to be pleased with the arrangement.
D-Wave Quantum (QBTS), Rigetti Computing (RGTI), and Quantinuum (QNT) all moved up in recent trading, with each company gaining a respective 10%, 8%, and 6%. The gains followed an announcement that the trio had agreed to hand the U.S. Department of Commerce minority equity stakes in return for receiving $100 million each in CHIPS Act funding.
“The Administration has made clear that U.S. quantum leadership will require not only breakthrough research, but also the ability to scale, commercialize and manufacture these technologies,” D-Wave CEO Dr. Alan Baratz said in a release. “This award will help fulfill that mission by expanding domestic quantum capabilities, strengthening the underlying supply chain and bringing increasingly powerful quantum systems to market.”
The Deal at a Glance
The Department of Commerce is receiving a minority equity stake from each company, with each transaction returning $100 million to the companies involved.
The money stems from the CHIPS and Science Act, and it is designed to build up American quantum abilities, with a focus on production lines and the networks that feed into them.
No date is given for the announcement of the arrangement in the source material. What is known is the figure of $100 million per company and the fact that it represents a minority position.
| Company | Ticker | Recent Move | CHIPS Funding |
|---|---|---|---|
| D-Wave Quantum | QBTS | +10% | $100 million |
| Rigetti Computing | RGTI | +8% | $100 million |
| Quantinuum | QNT | +6% | $100 million |
Baratz on the Award
Baratz positioned the funding as a means to shift quantum research from the laboratory into actual production.
The prize is meant to aid the expansion, market launch and production of quantum technologies, he explained. He further cited the need to bolster the supply chain.
A broader industrial aim ties the government’s interest to quantum leadership. This is not merely about achieving breakthroughs within the laboratory itself. It is about constructing and putting into service actual systems that can then be sold.
According to Baratz, the money is intended to build up homegrown quantum abilities while fortifying the supply chain underneath them. The goal is to get more powerful quantum systems into commercial use.
A Difficult Year Before This
Today’s gains come after a rough stretch.
D-Wave and Rigetti shares have lost more than one-quarter of their value since the start of the year. Quantinuum shares have declined about 12% from their initial public offering price in June.
The sector remains volatile.
Even with the gains recorded today, the losses from earlier in the year remain unsettled. The stock moves were prompt and favorable, yet they come after a period of decline for all three companies.
What the Government Gets
Each company carries an equity stake that places the government’s interests directly on the line with its performance.
Each company now carries a minority stake held by the Department of Commerce, and the size of those holdings remains undisclosed.
The funding was secured through a trade, with the companies agreeing to hand over equity in return. The source does not describe any further terms of the arrangement beyond that exchange.
Key Facts
- D-Wave Quantum (QBTS): +10% in recent trading
- Rigetti Computing (RGTI): +8% in recent trading
- Quantinuum (QNT): +6% in recent trading
- Funding: $100 million each from CHIPS Act money
- Stake: Minority equity to the U.S. Department of Commerce
- Year to date: D-Wave and Rigetti down more than one-quarter; Quantinuum down about 12% from its June IPO price
The Takeaway
The government now owns a piece of three quantum companies.
Investors now have a reason to take another look at these companies. The money has been secured, the terms have been agreed upon, and traders have already reacted.
Even with one announcement made, the year’s losses remain on the books. A single statement does nothing to change the course of events.
Now the U.S. government has taken an ownership stake in all three firms, joining them as a new investor. Whether that will help or hurt their performance over time is a question the source does not attempt to answer.
Source: finance.yahoo.com
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