Quantum Frontier: Why the US Needs Clear Rules for Government Investment in Future Technologies
Quantum computing presents a unique challenge for US industrial policy. Unlike areas such as drones, batteries, or rare earth metals, where the government can stimulate the market through procurement and regulation, the quantum industry is in its infancy. Commercial products are virtually nonexistent, the dominant architecture is undefined, and supply chains have yet to be formed. It is precisely this, in my view, that makes early and carefully considered government intervention not just justified, but critically important for preventing future technological dependence.
The connection between quantum technologies and national security is beyond doubt. Scalable quantum computers could in the future break public-key cryptography, threatening the entire digital infrastructure. Furthermore, related developments find applications in sensors, navigation, and communications. Therefore, this sector is a rare case where direct government funding may be not just desirable, but necessary. However, it is important to understand: such support should not become a universal model for the entire economy.
The Commerce Department Program and Market Reaction
In May, the US Department of Commerce announced the allocation of $2.013 billion under the CHIPS and Science Act. The funds are directed towards building two quantum foundries and supporting seven companies, including IBM ($1 billion for a subsidiary focused on superconducting wafers), GlobalFoundries ($375 million), and a number of startups such as Atom Computing, D-Wave, Infleqtion, PsiQuantum, Quantinuum, Rigetti, and Diraq (ranging from $38 to $100 million).
A key condition is the government receiving a minority, non-controlling stake in each company. It was precisely this point that led Google to decline participation. The corporation believed that such requirements could slow down innovation and the path to creating a useful quantum computer. I believe this conflict exposes a fundamental problem: how to balance protecting taxpayer interests with the freedom of technological development.
Three Principles for Prudent Investment
To avoid mistakes, three key principles for government investment in technology can be formulated:
- Intervention only in cases of a clear threat to national security or a serious economic vulnerability that the market cannot address on its own.
- Do not invest where a finished product can be purchased. In the case of quantum computing, this approach does not yet work, as the necessary products do not yet exist on an industrial scale.
- Maintain distance between the government and business. Taxpayers should benefit from the growth of companies, but direct equity ownership creates political risks and can distort market incentives.
One effective tool could be warrants, which give the government the right to participate in the growth of companies' value without full control over them. This approach allows supporting innovation without becoming a "state capitalist."
Looking to the Future
Earlier, the US President signed an executive order to accelerate the transition of federal systems to post-quantum cryptography. This is a correct step, but, as experts rightly note, for decentralized networks like Bitcoin, the problem is much more complex—they cannot be updated by government decree. In parallel, the Department of Defense is launching the Farseer program to develop quantum sensors for intelligence with a budget of up to $200 million.
My expert assessment: The quantum race is just beginning, and the US is betting on public-private partnerships. However, success will depend not on the amount of funding, but on how flexible and well-thought-out the rules of the game turn out to be. Excessive control can stifle innovation, while its absence can lead to strategic vulnerabilities. The golden mean is not a compromise, but a necessity.