Quantum computing firms jump after report of US government stake talks

(Reuters) - Shares of US quantum computing companies jumped on Thursday after the Wall Street Journal reported that President Donald Trump's administration is in discussions to acquire equity stakes in exchange for federal funding.

A US Department of Commerce official told Reuters in an email that the department is "not currently negotiating with any of the companies".

The Defiance Quantum ETF, which tracks companies whose products or services are tied to the development of quantum computing and machine learning technology, added 1.3%, and was set to build on its 32% gain so far this year.

MOVE COULD SIGNAL DEEPER FEDERAL ROLE IN FRONTIER TECH

The Trump administration has ramped up efforts to secure U.S. supply chains for critical minerals and semiconductors by converting federal grants to companies into equity stakes, aimed at reducing reliance on China.

"The quantum computing offers the chance to really revolutionize the U.S. economy, and in that sense it's the administration doing things in an unconventional way," said IG Chief Market Analyst Chris Beauchamp.

Quantum computers tap into quantum mechanics to solve problems that would take classical computers thousands of years or more. But existing quantum computers dedicate so much of their computing power to fixing errors that they are not, on net, faster than classical computers.

In February, Microsoft unveiled a new chip that it said showed quantum computing is "years, not decades" away, while IBM in June said it plans to have a practical quantum computer by 2029.

Shares of IonQ, Rigetti, and D-Wave Quantum have had a volatile month, climbing to record highs last week before sliding into a string of daily declines.