Why Google Passed on U.S. Quantum Funding—and What D-Wave, Rigetti and Quantinuum Gave the Government

Google Quantum AI says it passed on a U.S. government quantum-computing funding opportunity because of “various conditions” that conflicted with its desire to move as quickly as possible toward a useful quantum computer. Google has not publicly identified those conditions individually. It has not said that government ownership, patent rights, domestic-manufacturing rules or any other specific provision was the reason it declined.

What changed in September is that the contracts accepted by several companies that did participate are now public.

D-Wave, Rigetti and Quantinuum each entered into U.S. Department of Commerce agreements for up to $100 million in quantum R&D funding and issued shares to the government in connection with those awards. The equity stakes are minority positions with sharply limited voting rights. But the broader bargain goes much further than stock: funding is tied to milestones, while the agreements impose intellectual-property rights, domestic-control and production requirements, research-security obligations, restrictions involving certain foreign entities, and potentially substantial repayment or termination remedies.

There is one crucial limit to what these documents prove about Google: Commerce negotiates these agreements individually. The contracts accepted by D-Wave, Rigetti and Quantinuum show what participation in this program can require. They do not prove that Google was offered those exact terms.

That distinction produces a clearer answer than the simplified version circulating in financial coverage: Google did not publicly reject “government ownership” specifically. It rejected a funding arrangement carrying unspecified conditions. The newly public recipient contracts reveal how extensive such conditions can become.

What is established, what is unknown, and what can reasonably be inferred?

Verified: Google chose not to take the funding because, according to Google Quantum AI COO Charina Chou, there were “various conditions” and Google wanted “to move as quickly as we can to a quantum computer.” Chou also said Google was working with the government in other ways and wanted increased federal support for basic research.

Verified: D-Wave, Rigetti and Quantinuum accepted individually negotiated federal R&D agreements for up to $100 million each and issued Commerce equity connected to the maximum award amount.

Unknown: Google has not disclosed what amount it might have received, what final contract it was offered, how far negotiations progressed, or which particular conditions caused it to walk away.

Reasonable inference: If Google’s contemplated terms involved constraints broadly similar in character to those visible in the finalized recipient contracts, its concern about speed is understandable. These are multi-year arrangements involving milestones, government oversight, IP rules, research-security obligations and long-lived restrictions. That inference is supported by the structure of the program, but it is not proof of Google’s private negotiating position.

What did D-Wave, Rigetti and Quantinuum actually give the government?

The easiest part of the deal to understand is the equity. The harder—and arguably more important—part is everything attached to the federal R&D money.

D-Wave’s agreement provides an initial $53,552,620, followed by four later amounts tied to milestones or completion. Its milestones concern equipment installation, quantum-processing-unit fabrication, process integration, calibration and benchmarking. Commerce received 7,095,721 D-Wave shares at $14.093 each.

Rigetti receives $43.9 million initially. Another $29.9 million and $26.2 million become available if Commerce determines, to its satisfaction and in its sole discretion, that Rigetti has satisfied the applicable milestone criteria on time. Commerce received 7,739,938 Rigetti shares at an implied $12.92 each.

Quantinuum receives $56 million initially, followed by $32 million and $12 million after specified project milestones. Commerce received 2,369,528 Class A shares. Quantinuum’s pricing formula used the lower of a 20% discount to its IPO price or a 15% discount to the market closing price on the award date. The issued share count implies a price of about $42.20 per share.

These are therefore not simply transactions in which Washington sent three companies $100 million checks and bought some stock.

The companies did not receive $100 million upfront

“Up to $100 million” matters.

At signing, D-Wave had roughly $53.6 million available under the first tranche, Rigetti $43.9 million and Quantinuum $56 million. The rest depends on project performance.

For D-Wave, the subsequent tranches total $46.447 million and depend on specified technical milestones and expected project completion.

Rigetti’s arrangement is even clearer about federal discretion. Commerce must determine to its satisfaction that the required milestones and success criteria have been achieved before the next $29.9 million and $26.2 million tranches become available.

Quantinuum similarly must reach milestones before accessing its additional $44 million.

That creates an important distinction between the maximum award and the money already available to the recipient.

Why did Commerce get roughly $100 million worth of stock before paying the entire award?

The equity packages correspond to the maximum award value.

D-Wave’s 7,095,721 shares multiplied by the contractual $14.093 issuance price equal approximately $100 million. Rigetti’s 7,739,938 shares at $12.92 also equal essentially $100 million.

But the agreements contain a mechanism designed to keep Commerce from freely disposing of a $100 million equity block while only part of the federal funding has been disbursed.

For D-Wave, Commerce generally may transfer only the proportion of its shares corresponding to the award money D-Wave has actually withdrawn and not returned.

Rigetti’s agreement uses the same basic concept: absent company consent, Commerce’s transferable share count is limited according to the award funds actually disbursed and retained.

Quantinuum disclosed an equivalent proportional restriction.

So if only part of the award has actually reached the company, part of the government’s equity position remains restricted as well.

What is the $1 share-repurchase provision?

Another unusual provision is easy to misunderstand.

If Commerce terminates an award for convenience before the award period ends, the company can generally repurchase the portion of the government shares corresponding to federal money that was never received or was returned before being spent on eligible costs. The aggregate repurchase price for that proportional block can be just $1.

That does not mean a company automatically gets its stock back for $1 whenever it misses a technical milestone.

Milestone failure can prevent later funding and, depending on the provision violated, trigger other remedies. The $1 mechanism addresses a different situation: the federal government terminating the award for convenience while part of the promised award remains undisbursed.

How much of D-Wave does the U.S. government own?

Commerce’s 7,095,721 D-Wave shares amount to approximately 1.9% of the company based on its latest reported pre-award share count.

D-Wave reported 369,263,837 common shares outstanding as of August 5, plus 3,176,096 exchangeable shares convertible one-for-one into common stock. Adding the new federal shares produces a Commerce position of roughly 1.87% on a common-plus-exchangeable basis, or approximately 1.89% using common shares alone.

The sensible public-facing figure is therefore about 1.9%, rather than pretending the exact percentage is fixed under every fully diluted ownership methodology.

How much of Rigetti does the government own?

Rigetti had approximately 333.77 million shares outstanding before the transaction. Adding Commerce’s 7,739,938 new shares produces a government position of approximately 2.27% of post-issuance common stock, before accounting for potential dilution from options, warrants or other future securities.

That makes the federal position somewhat larger proportionally than Commerce’s stake in D-Wave.

Does the government own 0.9% or 6% of Quantinuum?

Both numbers can appear depending on what is being measured, which is why a single percentage can be misleading.

Quantinuum reported 36,893,857 Class A shares and 226,414,285 Class B shares outstanding as of August 13. Commerce then received 2,369,528 new Class A shares.

That federal block equals approximately 6.03% of the post-issuance Class A shares.

But Quantinuum’s corporate structure also contains more than 226 million Class B voting shares. Class A and Class B each carry one vote per share, while the Class B stock itself has no economic rights and generally corresponds one-for-one with economic interests held in Quantinuum Holdings.

Using combined post-issuance Class A and Class B shares as the voting denominator, Commerce’s block represents approximately 0.89% of the votes.

So “the government owns 0.9% of Quantinuum” is an oversimplification. The government’s new stock is about 6% of the publicly traded Class A class but less than 1% of combined Class A-plus-Class B voting shares.

Does the U.S. government control D-Wave, Rigetti or Quantinuum?

No.

Commerce described the contemplated quantum-company equity stakes in May as minority, non-controlling positions.

The final securities agreements reinforce that characterization.

While D-Wave’s shares remain held by a U.S. government entity, the holder generally cannot vote them. Exceptions include limited matters affecting the legal rights of the stock class and mergers, consolidations or similar business combinations.

Rigetti similarly says Commerce generally will not vote its shares, except on certain changes to the rights of the common stock and mergers or similar transactions.

Quantinuum says Commerce will not vote its Class A shares except on specified changes affecting the authorized shares, par value or rights of that stock class.

The federal government therefore did not acquire ordinary operating control of these companies.

But that does not mean its influence is trivial.

The government’s contractual leverage is more important than its voting power

Looking only at the equity percentage misses much of the deal.

Commerce controls the release of later funding tranches. It receives rights involving federally funded intellectual property and data. The agreements impose domestic-production and research-security rules. Some activities involving foreign entities require approval or are prohibited. Material violations can trigger withheld payments, termination or repayment obligations.

In other words:

The stock gives Commerce limited shareholder power. The R&D agreement gives Commerce much broader contractual leverage over the federally funded project.

D-Wave itself warned investors that the existence of a U.S. government equity position and related contractual rights could complicate future strategic transactions by making some third parties less willing to engage with the company. That is D-Wave’s risk disclosure, not proof that such a transaction will actually be blocked.

Rigetti likewise disclosed that federal ownership and the agreement’s foreign-entity restrictions could affect future partnerships, investments and strategic flexibility.

Does Commerce now own the companies’ quantum patents?

No—not in the ordinary sense of owning the patents outright.

D-Wave’s full agreement says the company can retain title to subject inventions while giving the U.S. government a nonexclusive, irrevocable, royalty-free worldwide license to practice those inventions for government purposes. The agreement separately provides conditional march-in rights.

Rigetti’s agreement contains a comparable structure. Its definition of “Government Purpose” specifically excludes, absent the march-in mechanism, selling or licensing covered inventions commercially to a Rigetti competitor or commercially manufacturing competing technology.

The government therefore gets meaningful rights, but “Commerce owns the patents” would be inaccurate.

Quantinuum has publicly disclosed that the government receives a nonexclusive, nontransferable, irrevocable, fully paid-up worldwide license to practice covered inventions for government purposes, along with rights in data produced under the award.

However, Quantinuum has not yet filed the complete Award Agreement or Securities Issuance Agreement. It says those documents will be filed with its Form 10-Q for the quarter ending September 30, 2026.

Because the complete Quantinuum contract is not yet public, it would be premature to assume every D-Wave or Rigetti march-in provision appears in identical form.

What are “march-in rights”?

March-in rights do not give Commerce an unrestricted ability to hand a recipient’s technology to competitors whenever it wants.

D-Wave’s agreement allows Commerce, under specified circumstances, to require licensing of a federally funded subject invention—for example, if the recipient is not making reasonable efforts toward practical application, if action is necessary to address unmet U.S. public-health or national-security needs, or if domestic-control and production requirements have been violated. The contract requires written notice and at least a 30-day cure period before exercise.

That is a significant government protection, especially for strategically important technology. But it is a conditional remedy, not automatic public ownership of the company’s IP.

How long do the domestic-production restrictions last?

Some of the obligations can last substantially longer than the active research project.

Rigetti’s agreement requires domestic ownership or control of federally funded IP for the period of performance and at least 10 years afterward. It also generally bars transferring that funded IP to a foreign adversary during that period and requires 60 days’ notice before certain transfers. Subject inventions must generally be predominantly produced or licensed for production in the United States for the project period and 10 years thereafter, subject to limited waiver provisions.

Its separate foreign-adversary protections run through the project period and five years afterward. Those rules restrict, absent Commerce approval, activities including certain expansions in foreign countries of concern, investments involving foreign entities of concern, research partnerships, technology transfers and some sales or services.

D-Wave’s contract contains materially similar long-lived domestic-production and foreign-adversary requirements. For example, subject inventions are generally subject to a 10-year U.S. production requirement, while several foreign-adversary provisions remain applicable for five years after the performance period.

Quantinuum’s 8-K says federally funded IP generally may not be sold, transferred, licensed or assigned to a foreign country or entity of concern during the project period and for at least 10 years afterward, subject to limited exceptions. It also requires covered inventions to be predominantly produced or licensed for production in the United States for 10 years after the performance period.

These are substantial restrictions.

They are not, however, a blanket ban on international collaboration. The agreements target defined foreign countries or entities of concern, funded technology and specified transactions, and some restrictions contain Commerce approval or waiver mechanisms.

What happens if a company misses its milestones or violates the agreement?

Several different consequences can apply, and they should not be conflated.

First, later funding can remain unavailable. That is the ordinary significance of milestone-gated tranches.

Second, certain failures can produce repayment obligations.

Rigetti says that if required project activities are not completed by applicable deadlines, subject to cure or forbearance provisions, Commerce may demand recovery of payments already made as a debt. Material failures involving security or domestic-control and production requirements can also support recovery or termination.

Quantinuum’s disclosure is especially explicit: Commerce can claw back up to the full amount actually disbursed for material failures involving research security, domestic control of IP or domestic production, or for failure to complete certain required project activities on time. Commerce can also withhold payments, suspend access to funds or terminate the agreement for material violations.

Third, the previously discussed $1 stock repurchase is a separate mechanism associated with a federal termination for convenience and the portion of funding that was never received or was returned.

So why would these companies accept terms Google would not?

No public evidence establishes any recipient’s complete internal reasoning, so this question requires separating financial context from motive.

The balance sheets show that the same nominal amount of funding has very different significance at different companies.

As of June 30, Alphabet reported approximately $242.5 billion in cash, cash equivalents and marketable securities.

D-Wave reported approximately $546.2 million in cash and marketable investment securities.

Rigetti reported approximately $541.3 million in cash, cash equivalents and available-for-sale investments.

Quantinuum reported approximately $2.107 billion in cash.

For scale only, $100 million equals about:

• 0.04% of Alphabet’s reported liquid assets;
• 18.3% of D-Wave’s;
• 18.5% of Rigetti’s;
• 4.7% of Quantinuum’s.

Those comparisons do not prove why any company made its decision. Alphabet’s figure is company-wide and tells us nothing about Google Quantum AI’s internal budget. More importantly, the public record does not establish that Google itself was offered $100 million.

Still, it is reasonable to infer that federal capital can have dramatically different marginal value depending on a company’s size and financing position.

That explanation is also incomplete, however. Quantinuum had more than $2 billion of cash and still accepted the federal agreement. Capital need alone therefore cannot explain participation.

Federal involvement may also provide strategic value through U.S. manufacturing infrastructure, national-security relationships and integration into a government-backed quantum industrial strategy. PsiQuantum co-founder Pete Shadbolt, for example, publicly described federal involvement as natural because quantum computing has major geopolitical and national-security implications.

Those are plausible incentives. They should not be treated as proven motives for every recipient.

Google did not reject government support for quantum computing generally

Google’s decision can easily be overstated.

Chou did not argue that Washington should stay out of quantum research. In the same discussion in which she explained Google’s decision not to take this particular funding, she said government could do more and that Google wanted to see increased funding for basic research. She also said Google continued to work with the government in other ways.

The evidence therefore supports a narrower conclusion:

Google objected to the conditions attached to this particular funding opportunity, not to federal quantum investment as a general principle.

Was Google offered the same deal as D-Wave or Rigetti?

There is no evidence that it was.

NIST says terms and conditions under the Broad Agency Announcement are negotiated “on an individual award basis.” The program’s taxpayer-return component can take the form of equity, warrants, IP licenses, royalties, revenue sharing or other instruments. All awards under the BAA use Other Transaction Agreements.

Rigetti’s own history shows why that distinction matters.

Its May disclosure contemplated a $19.9 million initial payment, later potential payments of $22.2 million and $18.5 million, and another possible $39.4 million for other project activities.

By September, the negotiated final structure had become $43.9 million initially, followed by $29.9 million and $26.2 million.

Even one company’s deal changed materially between the preliminary letter of intent and final contract.

It would therefore be unsound to reverse-engineer Google’s private negotiations from another company’s finalized agreement.

Why are these called Other Transaction Agreements instead of ordinary grants?

The Commerce program is structured more broadly than a conventional federal grant.

NIST says every award under this Broad Agency Announcement is an Other Transaction Agreement, or OTA. The agency can negotiate a taxpayer-return component including equity, debt-like instruments, warrants, royalties, licenses, revenue sharing or other upside-sharing arrangements.

That is why descriptions such as “the government gave the companies grants and bought stock” can be misleading.

A more accurate description is:

Commerce is providing milestone-based federal R&D financing under negotiated agreements that also give taxpayers an equity or other financial-return mechanism.

For these three public companies, equity became part of that negotiated return.

PsiQuantum also finalized a $100 million quantum award

D-Wave, Rigetti and Quantinuum were not the only quantum-computing companies whose awards were finalized on September 8.

Commerce also announced a final award of up to $100 million to PsiQuantum for work involving photonic quantum-computing technologies, including electro-optic materials, single-photon detectors and low-loss photonic packaging.

PsiQuantum is not included in the detailed equity table above because it is privately held and does not provide the same SEC disclosure trail as D-Wave, Rigetti and Quantinuum.

Commerce’s May announcement said the contemplated quantum-computing awards would include minority, non-controlling federal equity stakes. The September PsiQuantum announcement confirms the final R&D award but does not publicly provide securities mechanics comparable to the SEC agreements available for the three public recipients.

Did IBM reject U.S. quantum funding too?

There is no evidence that it did.

IBM belongs in a different part of Commerce’s quantum portfolio.

In May, Commerce and IBM announced a letter of intent for a proposed $1 billion CHIPS award supporting Anderon, a planned purpose-built quantum foundry. IBM said it would contribute another $1 billion in cash, along with IP, assets and employees.

As of September 9, NIST’s public CHIPS release list showed final September 8 awards for GlobalFoundries, D-Wave, Rigetti, Quantinuum and PsiQuantum, but no corresponding final IBM/Anderon award announcement.

That does not establish that IBM withdrew or that Commerce rejected it. It means only that a final award had not been publicly announced by NIST at that point.

IBM therefore should not be grouped with Google as a company that simply turned down federal quantum money.

What happened to all nine companies Commerce named in May?

Commerce’s May 21 announcement covered nine letters of intent totaling $2.013 billion: seven quantum-computing companies and two quantum-foundry projects. Those were preliminary planned awards, not nine final contracts.

As of September 9, the public status was:

NIST’s current CHIPS releases identify those five September 8 finalizations.

The absence of a final announcement for IBM, Atom Computing, Diraq or Infleqtion does not tell us why their transactions had not been finalized publicly. It would be speculation to describe them as rejected, withdrawn or failed deals without additional evidence.

What Google’s decision actually tells us

The strongest conclusion is less sensational than “Google refused to let the government own part of it,” but it is better supported.

Established: Google believed unspecified conditions attached to Commerce funding were inconsistent with how quickly it wanted to pursue its quantum roadmap.

Established: Companies that accepted the program took on considerably more than ordinary shareholder dilution. Their agreements combine equity with milestone control, federal IP and data rights, domestic-production requirements, research-security obligations, restrictions involving specified foreign entities and significant remedies for noncompliance.

Established: The government’s equity positions are minority and largely non-voting. Washington did not acquire operational control of D-Wave, Rigetti or Quantinuum merely by becoming a shareholder.

Unknown: Google has not publicly identified the specific conditions it rejected, the amount it might have received or the exact contract it was offered.

Reasonable inference: Different companies can rationally reach different conclusions about the same federal program because the value of the capital, manufacturing support and government relationship must be weighed against regulatory, strategic, IP and compliance constraints. The $100 million ceiling is financially significant for some standalone quantum companies and almost immaterial at Alphabet’s scale—but Quantinuum’s participation shows that financial need is not the whole explanation.

The key point is therefore not that Google saw something hidden that its competitors missed.

It is that federal quantum funding is not free money. The public contracts show a negotiated exchange: taxpayer capital and government backing on one side, equity, milestones, domestic commitments, IP rights and long-lived compliance obligations on the other.

Google decided that the conditions on the opportunity it considered were not worth the trade-off for its preferred pace. D-Wave, Rigetti, Quantinuum and PsiQuantum made a different calculation.

Only the companies—and Commerce—know exactly how those private calculations were made.

References and Further Reading

U.S. Department of Commerce / NIST

Department of Commerce Announces Letters of Intent With 9 Companies for $2 Billion to Accelerate U.S. Leadership in Quantum Computing — The May 21, 2026 announcement identifying the original nine proposed recipients, amounts and contemplated minority federal equity stakes. NIST: May 2026 quantum letters of intent announcement

Frequently Asked Questions: Broad Agency Announcement — NIST’s explanation that the awards are individually negotiated Other Transaction Agreements and may include equity, warrants, IP licenses, royalties, revenue sharing or other taxpayer-return mechanisms. NIST: CHIPS R&D Broad Agency Announcement FAQs

Department of Commerce Announces Finalization of CHIPS R&D Award with D-Wave — Official September 8 confirmation of D-Wave’s award of up to $100 million. NIST: D-Wave final award announcement

Department of Commerce Announces Finalization of CHIPS R&D Award with Rigetti — Official September 8 confirmation of Rigetti’s award of up to $100 million. NIST: Rigetti final award announcement

Department of Commerce Announces Finalization of CHIPS R&D Award with Quantinuum — Official September 8 confirmation of Quantinuum’s award of up to $100 million. NIST: Quantinuum final award announcement

Department of Commerce Announces Finalization of CHIPS R&D Award with PsiQuantum — Confirms the fourth finalized quantum-computing award announced September 8. NIST: PsiQuantum final award announcement

Securities and Exchange Commission filings

D-Wave Quantum — September 4/8, 2026 Form 8-K — Primary disclosure of funding tranches, issuance price, transfer restrictions, voting rights and the $1 proportional repurchase mechanism. SEC: D-Wave Commerce award Form 8-K

D-Wave Quantum — Other Transaction Agreement — Full contract containing detailed government-purpose IP rights, march-in provisions, domestic-production rules and foreign-adversary protections. SEC: D-Wave Other Transaction Agreement

Rigetti Computing — September 2026 Form 8-K — Primary disclosure of its $43.9 million initial tranche, later milestone funding, 7,739,938 federal shares and securities restrictions. SEC: Rigetti Commerce award Form 8-K

Rigetti Computing — Other Transaction Agreement — Full contract covering IP, march-in rights, domestic production, foreign-adversary provisions, security requirements and remedies. SEC: Rigetti Other Transaction Agreement

Quantinuum — September 8, 2026 Form 8-K — Primary disclosure of the $56 million initial tranche, later milestone payments, 2,369,528 federal Class A shares, government IP rights, transfer limits and clawbacks. The full agreements had not yet been filed when this article was prepared. SEC: Quantinuum Commerce award Form 8-K

Quantinuum — Q2 2026 Form 10-Q — Source for the company’s Class A/Class B structure, voting rights, cash position and outstanding share counts used in sherafy.com‘s ownership calculations. SEC: Quantinuum Q2 2026 Form 10-Q

Google and broader context

Google quantum executive: U.S. government funding would have come with “conditions” — Semafor’s June 10 report containing Google Quantum AI COO Charina Chou’s direct explanation for not taking the funding and her support for additional basic-research investment. Semafor: Google’s explanation for declining the funding

Alphabet — Q2 2026 Form 10-Q — Source for Alphabet’s company-wide $242.5 billion in cash, cash equivalents and marketable securities used only as financial-scale context. SEC: Alphabet Q2 2026 Form 10-Q

IBM and U.S. Department of Commerce Announce America’s First Purpose-Built Quantum Foundry — IBM’s announcement of the proposed $1 billion Commerce award for Anderon and IBM’s planned $1 billion contribution, showing why IBM should not be characterized as having simply rejected federal funding. IBM: proposed Anderon quantum foundry award

Editorial currency note: This article reflects publicly available Commerce, NIST and SEC records through September 9, 2026. Quantinuum has said it intends to file its complete Award Agreement and Securities Issuance Agreement with its Form 10-Q for the quarter ending September 30, 2026. The status and terms of the remaining May letters of intent may also change.