The recent sell-off in crypto and tech stocks has rattled global markets. But the real battle over the future of one of the most consequential—and least understood—technologies isn’t playing out on Wall Street. It’s unfolding in Washington, where the fate of the quantum industry hangs in the balance. With billions of taxpayer dollars at stake, policymakers are weighing whether the government should buy shares in quantum firms or rely on market-driven tools to spur innovation.

The Department of Commerce is reportedly exploring equity stakes in a handful of quantum companies in exchange for federal funding. The Department has disputed this characterization, yet its grant solicitations state that applicants may be required to provide equity to the government. This proposal extends a new pattern in U.S. industrial policy: converting grants into equity. Earlier this year, the Commerce Department converted roughly into an equity stake. Supporters argue that equity lets taxpayers share upside, strengthens domestic chip manufacturing, and signals a serious U.S. commitment to semiconductors.

Now, a similar playbook is being considered for quantum. Even if the Intel deal looks smart on paper, what’s on the table now for quantum is something else entirely: using equity stakes as a policy instrument in frontier technology. That’s a much riskier proposition for both markets and taxpayers than supporters admit.

Quantum technology has the potential to unlock significant economic value, create new jobs, and shape future industries. It could also one day break many of the encryption systems that keep our data, finances, and communications safe. That combination of opportunity and risk is a powerful reason to ensure these capabilities are developed in the United States. Few would argue that America can afford to fall behind.

But having the Department of Commerce buy equity stakes in a short list of quantum firms raises two big issues:

First, it lets the government pick winners. The government is deciding which companies should get a capital boost, rather than setting general rules and letting investors decide. This is problematic in a field like quantum technology, because it narrows competition in an arena that is still wide open. Take the example of quantum computing. No one knows yet which technology architecture will ultimately dominate: superconducting qubits, trapped ions, neutral atoms, photonics, silicon spin qubits, or some hybrid approach. That’s exactly the sort of firm-specific bet economists warn against in industrial policy—picking winners and losers with taxpayer money.

Second, it pulls the government into corporate governance. Equity isn’t just a check; it comes with control. While the Commerce Department’s investment in Intel was structured as passive ownership, it remains unclear if or how the government might exercise that control in the future, or what level of disclosure will be available to the public.

Government ownership is one way of signaling confidence in a nascent industry, but it’s neither the only nor the best way. Fortunately, the U.S. already has tools for signaling demand in new markets. One of the most innovative is the advanced market commitment (AMC).

AMCs commit public funders to buy a product or service in the future if it meets specified benchmarks. For example, an AMC for a pneumococcal vaccine guaranteed long-term purchases if companies met cost and efficacy criteria, helping bring new vaccines to market faster. 

Quantum is a natural fit for this model. You could imagine a quantum AMC in which the government commits to purchasing computing capacity in the future that meets specific performance, reliability, and security thresholds. Any firm that meets the bar can participate. 

A well-designed AMC has several advantages. It’s architecture neutral. That keeps the innovation race open and avoids prematurely locking the U.S. into one technology stack. 

And if quantum technology takes longer than expected to mature, taxpayers aren’t left holding shares in companies whose valuations may plunge. Public risk is tied to useful capabilities, not speculative equity value.

If Washington wants to de-risk critical quantum technologies, it should double down on what the government does best: funding upstream research, supporting shared infrastructure, and acting as an early, exacting customer for emerging capabilities. That approach gives American firms something equity alone cannot: a clear signal that if they build real performance, real demand will follow.

In quantum technology, the Commerce Department doesn’t need to be a stock picker. It needs to be a smart buyer. 

Julia Lane is Assistant Vice President for Science at the University of Chicago and Advisor to the Illinois Quantum and Microelectronics Park (IQMP), focused on science and technology strategy. The views here are her own and not those of the University of Chicago or IQMP.