Rep. Lofgren Raises Legal Questions About $2 Billion Quantum Deal

Rep. Zoe Lofgren (D-CA), the ranking member of the House Science, Space, and Technology Committee, called the announcement "illegal and troubling on so many levels" — the day after it was made public. According to Ars Technica, the $100 million equity stakes in nine quantum firms, plus a $1 billion co-investment with IBM to create a new quantum foundry called Anderon, prompted her direct accusation.

The Core Legal Issue

The funds come from the CHIPS and Science Act, signed into law during the Biden administration. That legislation was specifically written to fund microelectronics R&D with a focus on semiconductor technology through public-private research partnerships.

Quantum processors are not semiconductors. While there is overlap, the distinction is significant. The deals being struck are also equity investments in private companies, not public-private research partnerships. This represents a fundamentally different financial and legal structure than what Congress authorized, according to Ars Technica's reporting.

Lofgren's position is straightforward: the executive branch cannot spend money on things Congress didn't vote to fund.

The IBM Conflict

The largest allocation — $1 billion from the government matched by another $1 billion from IBM — goes to creating Anderon, a new quantum chip foundry. Anderon will inherit personnel and intellectual property from IBM and serve as a fabrication hub for quantum processing units.

Dario Gil is currently the Under Secretary for Science at the Department of Energy. Before that, he was a senior executive at IBM. According to Ars Technica, Lofgren flagged Gil's involvement in the negotiations that led to this deal. A former IBM executive helping structure a deal that sends $1 billion to IBM — on top of IBM's own $1 billion — raises questions about how such arrangements are reviewed and documented.

Legal Remedies and Obstacles

The most obvious legal remedy is a lawsuit, but that requires a plaintiff with standing — someone who can prove they were directly harmed by the redirection of funds. A company expecting CHIPS Act money for semiconductor research might have a case, but that argument could take months or years to wind through federal courts. By then, the money would be spent and Anderon operational.

Congress could theoretically claw back the funding legislatively, but that requires a majority willing to do so and a president willing to sign it. Neither appears likely.

Unresolved Legal Questions in Quantum Computing

The quantum computing space contains multiple legal uncertainties that will matter as these investments mature.

Quantum service contracts create IP ownership complications. When a company runs proprietary algorithms on a quantum provider's hardware, who owns the results? U.S. patent law under 35 U.S.C. § 262 defaults to joint owners each being able to license jointly developed patents without the other's consent. In a government-funded foundry situation, that default could create commercial problems — and the current contracts may not address it.

Congress introduced the Quantum Encryption Readiness and Resilience Act on August 8, 2025 — a bipartisan bill requiring formal assessments of whether the U.S. private and public sectors are prepared for encryption-breaking implications of quantum computers. The Government Accountability Office warned in January 2025 that a sufficiently powerful quantum computer could crack widely used encryption. The bill has not yet passed.

Patenting quantum algorithms remains legally unclear. Mathematical formulas cannot be patented, and quantum algorithms occupy ambiguous ground that patent examiners are not equipped to resolve.

Coverage and Oversight

Most outlets covered the $2 billion announcement as a tech investment story — innovation narrative, strategic competition with China. Few gave serious weight to Lofgren's legal objection or examined the Dario Gil angle.

The substance of the story is that the government may have spent money it was not authorized to spend, structured around a foundry that directly benefits the former employer of the official who helped negotiate the deal, with no clear legal mechanism to stop it.

Implications

Taxpayer funds are already committed to deals a senior member of the House Science Committee says are illegal. The legal system probably cannot stop it in time. Congress probably will not either.

Businesses that store sensitive data — financial, medical, government — face a real quantum encryption threat. The legislation to address it remains unsigned.

The fundamental question is whether the executive branch can redirect congressionally appropriated funds to whatever it deems strategically important. That question does not yet have a definitive answer.