IBM shares surged after the Trump administration agreed to award the company $1 billion for a quantum chip foundry. However, several awards remain ‘yet to be finalized,’ and some companies signed letters of intent for ‘as much as’’ $100 million.
International Business Machines Corp. shares rose 12% to $252.97 in New York on Thursday. The gain marked IBM’s biggest single-day rise in more than a year.
The rally followed a $1 billion funding agreement from the Trump administration. The award will support IBM’s plan to build a foundry for quantum computing chips.
IBM will also invest $1 billion in a new business called Anderon. The company said Anderon will produce quantum processors.
The funding will support a quantum wafer facility in Albany, New York. Senator Chuck Schumer said the facility will operate at an existing semiconductor manufacturing research center.
The IBM deal forms part of a broader $2 billion Commerce Department support package for quantum computing. The funds come from resources linked to the 2022 Chips and Science Act.
The government will receive minority, noncontrolling equity stakes in the companies that get awards. Commerce said the structure will allow the government to hold a financial interest in the funded firms.
The money comes from a research and development office that received $11 billion under the Chips Act. That law formed part of a wider $52 billion program signed by then-President Joe Biden to support the US semiconductor sector.
Commerce Secretary Howard Lutnick reshaped part of that funding plan last year. He voided $7.4 billion previously assigned to a nonprofit research effort and redirected part of the money toward investments that could bring returns to the government.
IBM was not the only company to gain after the funding news. GlobalFoundries rose 15% after the company said it will receive $375 million.
D-Wave Quantum gained 33%, while Rigetti Computing rose 31%. Infleqtion also surged 31% after signing a letter of intent with the Commerce Department.
D-Wave, Rigetti, Infleqtion and PsiQuantum said they signed letters of intent for “as much as $100 million apiece.” Atom Computing and Quantinuum also received $100 million awards, while Diraq will get $38 million.
However, the deals remain “yet to be finalized.” That wording leaves room for changes before the awards move into final agreements.
Governments continue to fund quantum computing because researchers believe the technology could support new work in drug discovery, finance and data security. However, the field still remains at an early stage.
Many quantum machines mainly serve research purposes today. Companies continue to test ways to use quantum physics to process information far faster than current computers.
The technology also raises security concerns. Future quantum systems could break encryption methods that protect banks, companies and government data.
Large firms and startups are competing in the sector. Microsoft and Google are among the companies working on quantum systems, while smaller firms focus on specialized hardware and chip designs.
The latest funding shows the US government wants to support domestic quantum production. Still, the careful wording around some awards, including ‘letters of intent’ and ‘as much as,’ shows that final terms are not complete yet.
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