Shares of China’s leading quantum computing companies have surged nearly 20% in two trading days after Washington announced a $2 billion funding package for nine US firms, as investors bet Beijing will respond with its own push to keep pace in the global race for quantum supremacy.
Quantum CTEK rose 19% to 641.08 yuan (US$88.70) in just two trading days on May 22 and 25. GuoChuang Software gained nearly 18% to 40.24 yuan, while Koal Software rose 9.5% to 20.97 yuan. The rally reflected a sharp move in US quantum stocks as Infleqtion surged more than 30%, Rigetti Computing jumped more than 63%, D-Wave rose roughly 53% and IBM gained about 13% in the two days of trading after Washington announced the funding package.
China’s quantum sector had already been building momentum this month. Origin Quantum launched the Origin Wukong-180, the fourth-generation superconducting quantum computer. The Chinese Academy of Sciences Cold Atom Technology (CASCA) unveiled what it described as the world’s first dual-core quantum computer. The University of Science and Technology of China (USTC) released Jiuzhang 4.0, a photonic quantum computer.
Analysts said the flurry of advances, combined with a US funding push, is likely to speed up Beijing’s timetable for state-backed investment in the sector.
On May 21, the US Department of Commerce DESIGNATED letters of intent to frame the initiative as a matter of national security as much as economic competition. The funds, totaling $2.013 billion, were distributed under the CHIPS and Science Act to support both domestic quantum foundries and IT companies, with the government taking a minority equity stake in each recipient.
The two beneficiaries of the foundry are GlobalFoundries, which will receive US$375 million to establish a domestic quantum foundry that includes multiple hardware approaches, and IBM, which will receive US$1 billion to build a new subsidiary for quantum-scale superconducting wafers.
The remaining $538 million is divided among seven companies, with Atom Computing, D-Wave, Infleqtion, PsiQuantum, Quantinuum and Rigetti each receiving up to $100 million to address specific unsolved engineering problems in various quantum modalities. Silicon spin specialist Diraq to receive up to $38 million.
“With today’s CHIPS R&D investment in quantum computing, the Trump administration is leading the world into a new era of American innovation,” said US Commerce Secretary Howard Lutnick. “These strategic quantum technology investments will build on our domestic industry, creating thousands of high-paying American jobs while advancing American quantum capabilities.”
As a condition of the awards, the Department will take a minority, non-controlling equity stake in each recipient company, a structure designed to increase returns to American taxpayers. The CHIPS Office of Research and Development said it continues to seek proposals from qualified applicants for research, prototypes and commercial solutions that advance microelectronics technology in the US.
The May 21 announcement marks the first time Washington has taken direct equity stakes in quantum computing firms, a significant shift from its traditional approach to providing research grants.
“The Trump administration’s decision to pour more than $2 billion into nine US quantum computing firms has sent capital markets into a frenzy.” says a columnist at National Business Daily. “In fact, Beijing had already moved early, placing quantum technology at the top of the list of six priority industries of the future in the 15th Five-Year Plan (2026-2030) last year.”
He says the other five technology sectors are biomedical, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied artificial intelligence (AI) and 6G telecommunications.
He adds that quantum technology deserves to be a priority battleground for any major power, citing three reasons:
- National security: quantum computing and communications will have a profound impact on information security and protection.
- Supporting other industries: the tremendous processing power of quantum computing can dramatically speed up drug development and materials design.
- Technological dominance: whoever moves faster will gain the power to set the rules of the game, injecting new energy into both defense and the economy.
“The US move represents the first time a national government has directly taken equity stakes in quantum technology companies, marking a formal escalation from a laboratory race to a state-level industrial war.” says a writer based in Anhui. “Nearly 70% of Washington’s strategic capital investment is focused on quantum mesh manufacturing, essentially replicating the playbook used to build semiconductor factories and laying the manufacturing foundations for the next generation of computing power.”
The writer says China remains one of the few countries able to keep pace with the US in quantum technology, with a domestic industry chain taking shape. He outlines three of China’s main advantages:
- Quantum communications: China holds an absolute global lead, with Quantum CTEK’s quantum cryptography communications technology now commercially deployed nationwide.
- Superconducting quantum computing: Origin Quantum operates the only 6-inch quantum chip production line in China, with a daily capacity exceeding 100 wafers, a yield rate of 92%, and its 180-qubit superconducting quantum computer now available as an online service.
- Policy support: Quantum technology tops Beijing’s 15th five-year plan list of six future industries.
“China’s main weaknesses lie in dedicated quantum wafer manufacturing and high-end control and measurement equipment, the very areas Washington is targeting with its latest funding push,” he says. “Domestic quantum cores still partially rely on conventional foundries for production, while purpose-built quantum wafer facilities remain under construction.”
China and the US are competing in three main approaches to quantum computing:
- Superconducting quantum computing, which uses supercooled electrical circuits like qubits: Origin Quantum and Quantum CTEK are China’s leading players, competing with IBM, Google and Rigetti.
- Photonic quantum computing, which uses particles of light to perform calculations: USTC’s Jiuzhang series leads in China, rivaling US firm PsiQuantum.
- Trapped ion quantum computing, which manipulates individual charged atoms as qubits: Beijing-based Qudoor is China’s leading contender, going up against Quantinuum and IonQ.
- Neutral atom quantum computing, which uses individual atoms held in place by laser beams as qubits: CAS Cold Atom Technology is China’s leading player, competing with US firms Atom Computing and Infleqtion.
US export controls
During the Biden administration, the White House had already moved to stifle China’s access to quantum technology, introducing export controls on quantum computers, critical components and related software in September 2024, followed by a ban on most US investment in China’s quantum sector that took effect in January 2025.
In March 2025, the Trump administration added about 80 companies to its export blacklist, more than 50 of which were Chinese. Among those sanctioned, six subsidiaries of Inspur Group, China’s leading cloud computing and big data provider, were accused of buying US technologies to develop AI and quantum technologies and build exascale supercomputers for the Chinese military.
So far, sanctioned Chinese quantum firms and institutions include Quantum CTEK, Origin Quantum, USTC, Jinan Institute of Quantum Technology, Hefei National Laboratory, Center for Excellence in Quantum Information and Quantum Physics, and Institute of Physics.
Despite US export controls, Chinese firms have continued to make progress by sourcing equipment from non-US suppliers. In footage broadcast by state broadcaster CCTV in January 2023, Origin Quantum revealed it was using a mask aligner made by Germany’s SÜSS MicroTec to produce its superconducting quantum chips, indicating that Washington’s controls had not completely shut off China’s access to key fabrication equipment.
The effort paid off when Origin Quantum launched the Origin Wukong-72, the third-generation 72-qubit superconducting quantum computer, in January 2024. Named after the Monkey King of Chinese mythology, the Wukong series uses qubits, which, unlike binary bits in conventional computers, can allow the simultaneous existence of multiple computers with more complex processes. calculations.
On May 9 this year, Origin Wukong-180, the fourth generation model, DOWN online and started accepting quantum computing tasks from users around the world. It carries 180 computing qubits on a single chip and achieves an accuracy rate of around 99% in its core operations.
Chinese scientists are also working around US export controls by developing quantum technologies that do not rely on dilution refrigerators, a cooling device whose sensitive components are tightly controlled by the West. Photonic quantum computing and neutral atoms are two such approaches.
On May 7, CASCA unveiled what it described as the world’s first two-core neutral atom quantum computer, Hanyuan-2.
Ge Guiguo, a senior solution expert at CASCA, said the machine is built on domestic neutral atom cluster technology and features a dual-core cooperative computer system with a total of 200 qubits. He said the machine marks the first time globally that a quantum processor has switched from a single-core to a dual-core architecture, representing a breakthrough in the fundamental design of quantum computing.
USTC published Results for Jiuzhang 4.0 in the journal Nature on May 13, showing that the photonic quantum computer solved a standard computational problem at a speed more than 10^54 times faster than the world’s most powerful supercomputer. The machine manipulated and detected quantum states of up to 3,050 photons, compared to 255 photons in its predecessor, the Jiuzhang 3.0.
Citing data from McKinsey, a columnist based in Liaoning said that China invested $15 billion in its quantum sector by 2024, more than double the $7 billion committed by US firms and the government combined. He said it is possible that Chinese firms will one day catch up with their American rivals.
However, some observers warned that China’s figures include significant infrastructure costs, and that a significant portion of its research and development spending has gone toward quantum communications rather than quantum computing, where the US holds a clear lead.
Read: Trump’s new sanctions on Chinese firms: leverage over Xi or overreach?
Follow Jeff Pao at X at @jeffpao3
