By Mackenzie Tatananni

D-Wave Quantum's inaugural investor day offered the usual roadmaps and affirmations, but the real highlight from Monday's event was information on a recent hot-button topic for investors: federal funding.

Stocks rallied last month after the Trump administration pledged to invest $2 billion into quantum technology. Details were sparse at the time, arriving in the form of non-binding letters of intent with nine companies.

Among them, a handful of players -- D-Wave included -- have tentatively agreed to give the government an ownership stake in their businesses. Under the pact, D-Wave will issue $100 million worth of common stock to the Commerce Department.

Speaking at the investor event, CEO Alan Baratz styled the funding as an affirmation of D-Wave's dual-track approach to quantum. The company has pioneered annealing quantum, an architecture that's tailored to optimization problems, but recently moved into more broadly applicable gate-model systems to capture a wider share of the market.

The Commerce Department deal throws financial weight behind a company whose business model is just starting to mature. Management noted on Monday that D-Wave was shifting from a quantum computing-as-a-service model to one increasingly driven by system sales.

The cash injection won't be automatic. Rather, it is contingent on research-and-development-based milestones, which Chief Development Officer Trevor Lanting said includes the delivery of prototypes.

Lanting ticked off a list of deliverables, among them quantum interconnects, new wiring, and what he described as "some fundamentally new fab techniques for driving potentially higher-performance technology." ("Fab" is shorthand for a fabrication facility.)

In short, "there's a series of tool installs, fab process nodes, and prototypes to deliver that make use of those process nodes," Lanting said.

Management also suggested the company might leverage IBM's upcoming chip factory to produce its own quantum processors. The Commerce Department and IBM each pledged $1 billion last month to form Anderon, styled as "America's first pure-play quantum foundry."

"We didn't know ahead of the announcement by the U.S. government who would be getting funding in this round," Baratz said, "but as soon as I heard the announcement, I sent an email to Trevor and I said, 'Can we use the IBM foundry?'"

IBM told Barron's at the time of the funding announcement that Anderon would count Big Blue as just one of its customers. Jay Gambetta, the company's head of research, referred to IBM as an "anchor client" for the otherwise independent facility.

D-Wave may be another one of those clients. "If they have technology that we can make use of and it's open to other potential companies to leverage, which I suspect it will be, given that it's got significant U.S. government investment, then we would absolutely use them," Baratz said on Monday.

The letters of intent inked last month for IBM, D-Wave, and other quantum businesses are a resounding endorsement of a technology once dismissed as highly speculative.

Federal funding for quantum isn't new, but the equity stakes mark a notable shift. The move directly parallels earlier efforts to secure domestic supply chains for chips and critical minerals.

Beyond the strategic implications, D-Wave's deal make sense from an organizational standpoint. Last December, the company created a new business division to handle growing demand at the federal level.

That effort now has "a very significant pipeline now across many parts of the government, mostly the Department of Defense," Baratz said. "Maybe the Chips funding was, in part, a result of that."

Management credited an earlier deal with defense contractors Anduril Industries and Davidson Technologies as the catalyst for federal interest, an agreement Baratz hailed as a tremendous validation of D-Wave's technology.

"What really caused our phone to start ringing off the hook was when Anduril participated in our customer conference back in January," the CEO said. "That really changed the view of the U.S. government."

D-Wave is working to position itself as a key player in the domestic quantum ecosystem. By aligning with the U.S. government, the company has secured something far more valuable than a $100 million injection -- a seat at the table as the U.S. races to onshore its quantum future.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 02, 2026 12:28 ET (16:28 GMT)

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