US awards IBM and other firms $2 billion to give America the edge in quantum computing

By Hanna Ziady, CNN

London (CNN) — The US Department of Commerce is awarding $2 billion to American quantum-computing companies — half of which will go to IBM — to bolster the buildout of super computers that could solve some of the world’s most pressing problems.

The move comes amid growing investment into quantum computing firms, which are racing to build computers that harness quantum mechanics to solve problems beyond the ability of even the most advanced computers.

IBM estimates that quantum computing will generate up to $850 billion in economic value by 2040. McKinsey & Company, meanwhile, thinks that just four industries — namely, automotive, chemicals, financial services, and life sciences — stand to gain up to $1.3 trillion in value by 2035 from quantum computing.

A $1 billion “incentive” from the Department of Commerce would support the research and development efforts of a new IBM company called Anderon, “America’s first pure-play quantum foundry,” IBM said in a statement Thursday.

“This initiative represents one of the most significant commitments by the US government to date in quantum R&D to position the United States to manufacture most of the world’s quantum wafers,” the company added, referring to the building blocks of quantum computer chips.

IBM said it would invest an addition $1 billion into Anderon, “with additional investors expected” as the company grows. Its shares gained nearly 4% at the open.

Quantum computers are able to solve problems much faster than traditional computers, making them potentially game-changing in areas such as health, energy, defense and the environment.

That’s because quantum systems work fundamentally differently compared to traditional computers, processing information at much higher speeds.

But they also pose grave risks to cybersecurity.

The long-predicted breakthrough in quantum computing — and the opportunities and threats it presents — has yet to emerge, however, even as the likes of IBM, Microsoft and Google continue working on the technology. That’s in part because enormous technical challenges still exist. For example, the “quantum bits” that quantum computers use to store and process information are extremely sensitive to external factors such as changes in temperature and light.

The US government’s latest investment will also benefit smaller firms such as D-Wave Quantum and Rigetti Computing, which are both due to receive up to $100 million in exchange for equity in the companies. The companies’ shares gained 14% and 12% respectively.

“We see this as a transformative moment for not just D-Wave, but also for quantum computing and the United States,” D-Wave CEO Alan Baratz said in a statement.

Rigetti CEO Subodh Kulkarni said the investment would allow the company to scale more quickly, bringing it closer to “utility-scale quantum computing.”

The funds will be disbursed under the CHIPS and Science Act. A total of nine quantum computing firms will benefit, the Wall Street Journal reported.

“With today’s… investments in quantum computing, the Trump administration is leading the world into a new era of American innovation,” Secretary of Commerce Howard Lutnick said Thursday in a statement.

CNN’s Lisa Eadicicco contributed to this story.

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