The Federal government has taken equity stakes in some rare earth development and production companies as supply chain control moves. Now the government is taking equity stakes in a few companies nascent and still doing basic research that’s becoming increasingly engineering-to-production in a critical industry—quantum computing.

The Trump administration is awarding $2 billion in grants to nine quantum-computing companies in deals that include US government equity stakes, the Commerce Department said.

In the middle of the last century, the Federal government started the Advanced Research Projects Agency in response to the USSR’s successful launch of a Sputnik satellite, soundly beating us into space. ARPA’s mission, ultimately, was centered on high risk, high gain R&D projects that were too expensive for private enterprise to start, but which private enterprise could develop into thriving businesses once that initial hurdle was overcome.

Quantum computing is a Critical Item industry which neither Russia nor the People’s Republic of China has beaten us at, but their progress threatens to gain critical leads in. The output of those ARPA projects, however, did not encompass the government taking equity stakes in the companies that ultimately went into production with those outputs. The government’s current moves are shades of that earlier ARPA approach, with government stakes thrown in.

And this:

[A] senior Commerce official said the agency did so many different deals to spread out its bets, acknowledging that it could take years for them to pan out.

This is a government version of a long-standing investment tactic, gorilla investing. The idea as implemented by private investors is to shotgun investments into a collection of companies in a new(er) industry, and then as they develop, or not, begin selling off the nots, while keeping those still promising or beginning to achieve success, repeating the process until the investor is left with the one or two that are actually taking off and the gains from which vastly outpace those prior losses. The technique often works.

Quantum computing, other nascent technologies, even the established areas like rare earths, though, may well benefit even more without the government ownership but with increased reduction in the regulatory environment within which those areas are being developed.