Washington Bets Big on Quantum as the Market Wagers Against It
Congress wants to raise US military spending on quantum technology by 68% this year, to $567 million, according to Bloomberg, with the House expected to take up the defense bill later this year and a parallel effort moving in the Senate.
It lands on top of a heavy federal push: more than $2 billion in Commerce Department letters of intent announced in May, and executive orders in June that put quantum near the center of the administration’s technology strategy.
Now look at the stock tickers: D-Wave, Infleqtion, and Rigetti have all fallen sharply this year. Washington is buying in at the exact moment the market is cashing out, and that’s the main story.
The government spends as the market leaves
The divergence is massive, as public money is climbing through grants and executive action, and private confidence is sliding. Philip Singerman of the Center for Strategic and International Studies told Bloomberg for the August 7 report that investors remain skeptical of the industry’s near-term commercial prospects, even after real technical progress, and the share prices show it, moving opposite the AI and semiconductor names that keep climbing.
IonQ is the exception that shows how unusual this year has been. It closed its $1.8 billion purchase of chip foundry SkyWater after regulators waved it through, then raised its revenue forecast and clawed back most of its losses. One company’s good fortnight doesn’t change the pattern, though, and the investors writing checks into the sector are pickier than the government now is.
What “the China race” is doing in the sentence
The spending is sold as a race, and China is the pacing threat. Beijing has stood up a $10 billion National Laboratory for Quantum Information Sciences, and Darío Gil, the Energy Department’s under secretary for science, told Bloomberg that China’s scale is a central worry for US policymakers.
The same reporting notes that Europe and the UK together have committed nearly three times the public funding the US has. So “America is falling behind” is a selective picture: behind China’s single-lab scale, maybe, and behind allies on total public money, which is a different problem than the China line implies. What the competition is actually about now is less a lab demo than supply chains and manufacturing, the unglamorous industrial base that decides who can build these machines at all.
The security case that survives a bad quarter
Set the politics aside and there’s a sound argument underneath. Governments fund strategic, long-horizon technology precisely when markets won’t, and quantum carries a security dimension a stock chart can’t capture.
A machine capable of breaking public-key encryption is a national problem whether or not any vendor turns a profit next year, which is why the federal effort ties funding to post-quantum cryptography and to quantum sensing for navigation, the sort of security work a stock price never rewards. That case doesn’t depend on quantum computers paying off soon. It depends on the technology arriving eventually, which most serious skeptics concede.
Access, lobbying, and some awkward proximities
Money in Washington also buys presence, and the quantum industry’s has grown fast. Matt Kinsella, chief executive of Infleqtion, told Bloomberg how much the doors have opened:
“When we first started doing this two years ago, we struggled to get meetings with staffers on the Hill. Now, we’re meeting directly with senators and representatives.”
The lobbying numbers moved with the access. Infleqtion, D-Wave, PsiQuantum, and Quantinuum, all four slated for Commerce grants, together doubled their annual lobbying to $2.2 million, Bloomberg reported from disclosure records. A few of the relationships invite a harder look.
PsiQuantum, in line for $100 million from Commerce, raised $1 billion last year from investors that included 1789 Capital, where Donald Trump Jr. is a partner. D-Wave, allocated the same $100 million, went public in 2022 under Emil Michael, now a senior Pentagon official. None of that is proof of anything improper, and the White House didn’t respond to Bloomberg’s questions, but proximity like this is what oversight exists to examine.
The bet Washington is making
The wager underneath all of it is that quantum is too strategic to leave to a market that isn’t convinced, and that funding early beats funding late. That may well be right. It’s the ordinary logic of public research money, and the security stakes are genuine. The same logic also steers public funds toward a small set of well-connected companies on a timeline nobody can price with confidence. Both are true at once. The question that outlasts the $567 million is the simple one: does the money buy capability, or does it buy access?