Washington Just Bet $2 Billion on the Future of Computing

The U.S. Department of Commerce just dropped a major announcement.

It will distribute $2 billion in grants to nine American quantum computing companies, with the federal government taking minority equity stakes in many of them.

The funding comes from the 2022 CHIPS and Science Act, and the deals are still being finalized, but the names involved tell you everything you need to know about where Washington thinks the next big technology race is headed.

IBM is getting $1 billion to build America’s first dedicated quantum chip foundry — a brand-new venture called Anderon, based in Albany, New York.

IBM is also matching the federal grant with $1 billion of its own. The combined investment will fund a 300-millimeter quantum wafer foundry designed to produce chips for next-generation quantum computers at industrial scale.

GlobalFoundries is getting $375 million.

PsiQuantum — one of the most advanced private quantum computing companies in the world — is getting $100 million through a Letter of Intent.

So are D-Wave Quantum, Rigetti Computing, Infleqtion, and Quantinuum. Diraq is getting $38 million.

The market response was immediate. IBM jumped 7% on the announcement. D-Wave and Rigetti both soared 25%. Infleqtion popped 30%. Even quantum names not included in the announcement — Arqit, IonQ, Quantum Computing Inc. — surged in sympathy.

But here’s what almost nobody covering this story is paying attention to.

Two of the three biggest recipients of this funding — PsiQuantum and GlobalFoundries — aren’t really quantum computing companies in the way most investors think of them.

They’re silicon photonics companies. The funding they received today is explicitly designated to develop optical switches, photonic detectors, and the kind of advanced light-based chip technology that I’ve been telling readers about for months.

The federal government just made a multi-billion-dollar bet on photonics — and they did it through the quantum door.

A Quiet Confirmation

What most investors don’t realize about quantum computers is that there are several competing architectures for how to build one.

Some use superconducting circuits cooled to near-absolute zero, like IBM’s systems. Some use trapped ions in vacuum chambers. Some use neutral atoms, like Infleqtion.

But the most scalable approach — the one most likely to actually deliver a useful, fault-tolerant quantum computer at industrial scale — uses photons. Light particles. The same fundamental technology that’s about to revolutionize traditional AI chips.

PsiQuantum is the largest privately held quantum computing company in the world, valued at roughly $7 billion. It is built entirely on silicon photonics, manufactured in partnership with GlobalFoundries.

The press release announcing their Commerce Department funding explicitly states the money will support “barium titanate optical switches, high-temperature single-photon detectors, and advanced packaging technologies.”

Every one of those is a silicon photonics component.

GlobalFoundries, which is now arguably the world’s largest dedicated silicon photonics foundry, just acquired the Singapore-based Advanced Micro Foundry last year specifically to expand its silicon photonics capacity.

The $375 million it just received from Washington will go directly to that effort.

In other words, the Commerce Department’s $2 billion quantum push isn’t just a quantum story. It’s the largest federal endorsement of silicon photonics ever announced — and it lands at the exact moment the rest of the industry is racing to scale this technology into mass production for AI data centers.

The U.S. government, in one announcement, just confirmed three things investors should be paying very close attention to.

First, photonics is now a strategic national priority.

The federal government doesn’t take equity stakes in companies it considers optional. Photonics has officially joined semiconductors, rare earth metals, and critical minerals on the list of technologies Washington has decided cannot be allowed to fail.

Second, the timing of this commitment is no accident.

It comes just weeks after TSMC publicly declared photonics critical to the future of AI computing, just months after Nvidia committed $4 billion to American photonics manufacturers, and just as the broader optical chip market is set to grow from $16.5 billion last year to $26 billion this year alone.

And third, the companies that hold the underlying intellectual property — the proprietary materials, modulators, and integration technologies that every photonic chip needs to function — are about to become some of the most valuable small-cap businesses in the country.

That last point is the one investors should focus on.

The obvious quantum names — IBM, D-Wave, Rigetti — will get most of the headlines and most of the institutional money. They’re great companies, and they’re going to do well.

But IBM is a $300 billion business. D-Wave is up over 600% in the past year. Rigetti is up nearly 1,000%. The easy money in the household quantum names has already been made.

The bigger opportunity is one layer down — in the small American companies whose proprietary photonic technology gets embedded into the chips themselves, regardless of which foundry builds them or which application they power.

I’ve been digging into one specifically for the past several months.

It’s a small American company holding the proprietary technology that I believe will become the industry standard for the high-speed light-based components going into next-generation chips — AI accelerators and quantum systems alike.

The technology is rare-earth-free, made in the U.S., and built to integrate directly into the manufacturing processes that TSMC, GlobalFoundries, and their competitors already use.

Right now, the company is generating just six figures in annual revenue. But every photonic chip the federal government just committed billions to fund needs technology like this to function. Even a small slice of that market would translate into a transformative outcome for a company this size.

I’ve put everything I know about this opportunity into a brand-new research report. You can get the full details right here.

Washington just told the market that light-based computing is the future of American technology.

The investors who recognize what that actually means are the ones who’ll thank themselves later.

Fight on,

Jason Simpkins

Simpkins is the founder and editor of Secret Stock Files, an investment service that focuses on companies with assets — tangible resources and products that can hold and appreciate in value. He covers mining companies, energy companies, defense contractors, dividend payers, commodities, staples, legacies and more… He also serves as editor of The Crow’s Nest where he analyzes investments beyond the scope of the defense sector.

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