The Trump administration will take a $2 billion equity stake in nine quantum-computing companies, including a new IBM venture, in a major push to secure US leadership in the emerging technology and counter China.

The move reflects the growing prominence of quantum computing, where recent technological advances have fueled investor interest in its potential to speed up tasks ranging from drug discovery to financial modeling and cryptography.

The US Department of Commerce said Thursday that IBM will get $1 billion to set up a company to produce quantum chips, while contract chipmaker GlobalFoundries will get $375 million to build a US factory producing components for a variety of quantum machines.

IBM said the new company, Anderon, will be based in New Albany, New York, and will be America’s first dedicated quantum chip manufacturing facility. He did not disclose the government’s stake in the new company.

IBM CEO Arvind Krishna told Reuters the new firm will offer its chipmaking technology to outside customers and is already in talks with potential customers. “They will definitely have the same capability that we have,” Krishna said.

Other companies, including D-Wave, Righetti Computing and Inflection, will receive about $100 million each, while Dirac will receive up to $38 million to overcome key technical hurdles that hold back more powerful systems, the Commerce Department added.

Two of the recipients belong to the administration. Emil Michael, the Pentagon’s top technology official, took D-Wave public in 2022 through a blank-check firm he headed at the time. PsiQuantum raised $1 billion last year from investors including Nvidia’s venture capital arm and Donald Trump Jr.-backed 1789 Capital. Shares of the companies involved in the deal rose between 6% and 31% following the announcement.

The funding, drawn from incentives under the Chips and Science Act signed by former President Joe Biden, is the latest example of Washington taking equity positions in strategic industries to bolster supply chains and compete with China.

Last year, the government converted some CHIPS Act grants as well as unpaid federal incentives into a 10% stake in Intel, making it the chipmaker’s largest shareholder. It has also taken a large stake in rare-earth mining company MP Materials.

“These strategic quantum technology investments will build on our domestic industry, creating thousands of high-paying American jobs while advancing American quantum capabilities,” said Commerce Secretary Howard Lutnick.

An uncertain timeline for quantum computers

Quantum computing has increased investor interest after recent advances, but major technical challenges remain, including high error rates that limit practical performance.

IBM will contribute $1 billion to Endron. It will also provide Anderon with intellectual property, assets and workforce and bring in additional investors as the new company grows.

GlobalFoundries, in which the US government is taking an equity stake of about 1%, said it has launched a new business called Quantum Technology Solutions, focused on scaling manufacturing for quantum-computing hardware.

GlobalFoundries chief technology officer Greg Bartlett told Reuters the company will work with multiple firms on control chips that can withstand the ultra-low temperatures required for quantum computers as well as advanced packaging technologies.

Inflection CEO Matthew Kinsella told Reuters that the investments underscore the technology’s growing potential.

“The government has proven that the technology so far is speculative, and I think this investment really further validates that quantum computing is coming faster than anyone thought,” Kinsella said.