Shares of International Business Machines spiked in May after the legacy tech giant unveiled an agreement with the U.S. government to build a quantum chip foundry. On Wednesday, that industry first became a reality.

Anderon, an IBM company, announced the finalization of a $1 billion award from the Commerce Department, structured as a research-and-development grant under the 2022 Chips and Science Act.

IBM is the latest quantum developer to lock in a funding agreement with the government. Last week, Rigetti Computing, D-Wave Quantum, and Quantinuum each inked $100 million deals with the Department of Commerce in exchange for equity stakes in their businesses.

The creation of Anderon underscores a broader federal push to safeguard domestic supply chains. The Trump administration’s heavy-handed involvement in the quantum sector mirrors past intervention in semiconductors and critical minerals.

IBM is the primary beneficiary of a $2 billion funding package first announced in May. The initiative includes deals with smaller pure-play quantum developers as well as a $375 million pact with chip maker GlobalFoundries to create a business unit centered on domestic manufacturing.

Big Blue has pledged $1 billion to support Anderon, which will operate as a subsidiary of the company. IBM Research chief Jay Gambetta told Barron’s in May that the company had reached a point in which it wanted to design a new quantum processor every year, which would require a “reliable baseline fab.” Anderon fills that void.

Located in upstate New York, the 300-millimeter wafer foundry will count IBM as just one of its customers. Interest from other companies like D-Wave underscores its role in the quantum ecosystem.

Mukesh Kare, the general manager of IBM’s semiconductors division, has been appointed CEO of Anderon. In a statement on Wednesday, Kare said the facility would lay the groundwork to advance quantum computing “from research breakthroughs to real-world impact.”

The technology has hooked attention ever since Alphabet’s Google unveiled its Willow quantum processor in late 2024, but enthusiasm has accelerated sharply this year. A flood of public listings has seized on that momentum to raise fresh capital, largely driven by Washington’s intense focus on the sector—a push driven as much by commercial ambition as national security.

Unlike today’s bit-based systems, quantum computers harness small-scale physics to process data. This opens up a far richer mathematical landscape and allows them to tackle problems previously out of reach for classical hardware alone.

The vision for the sector is a hybrid model in which classical computers are paired with quantum machines, an approach already proven in small-scale experiments. Quantum hardware gradually is being integrated with familiar technology, moving into data centers and working alongside classical supercomputers in research facilities around the world.

This breakthrough, however, presents a high-stakes trade-off. The advent of more capable quantum systems threatens to crack the encryption protecting much of the world’s data today, making the government’s interest a national security matter.

And yet, the industry remains in its infancy. Demonstrations of quantum advantage over classical hardware are largely confined to small-scale, “toy” problems in research settings.

Beyond its $2 billion funding push, the government aims to advance quantum computing through the Defense Advanced Research Projects Agency (DARPA), an arm of the Defense Department. As part of a rigorous validation effort, DARPA has recruited scientists from nearly a dozen companies to determine whether they can build an error-corrected, utility-scale quantum computer by 2033.

It remains unclear whether the government can achieve its loftier goals, including the delivery of a fault-tolerant quantum computer to a national laboratory by 2028. As scaling up quantum scaling inevitably results in more errors, researchers are focusing heavily on error correction.

But for investors, Anderson is just the latest sign that the technology is nearing an inflection point. The government’s involvement in the sector serves as a powerful validation of a technology that, until recently, was seen as nothing more than a far-off technical concept.

In an industry hardly lacking in ambition, Anderon and similar projects are clear signs that quantum is moving out of the lab and into the real world. Of course, there is still a ways to go.