Quantum Computing News

Roundup of National and New Mexico News: Shutdown Crisis, Quantum Incentives, and the Danger to US Innovation.

New Mexico quantum computing investment

With a strong push for quantum computing incentives and ongoing concerns about the effects of the protracted federal government shutdown, New Mexico is making significant legislative and economic decisions this week. In the meantime, many small businesses nationwide face an existential threat due to an unanticipated change in tax regulations.

New Mexico Officials Renew Push for $150M Quantum Tax Credit

Above Officials in charge of economic development in New Mexico are working to solidify the state’s standing as the “home of quantum computing.” Speaking to a legislative committee, the governor’s economic adviser, Alex Greenberg, argued in favor of approving up to $150 million in tax credits for people and businesses making investments in this emerging industry.

An emerging technology known as “quantum computing” uses aspects of quantum physics to process extremely complex data faster than current technologies. According to Greenberg, “quantum bits” or “qubits” are used in quantum computing to represent “one or zero simultaneously, or anywhere between a one and zero,” whereas standard computer bits are either a “zero” or a “one.” “Exponentially more powerful than its parallel in the classic computing realm” is what this indicates for each qubit.

Rapid advancements are anticipated, especially in cybersecurity and medicine, to the increased processing power provided by quantum technology. The promising prospects for “breakthroughs of novel pharmaceuticals that are for a full range of ailments” were highlighted by Greenberg.

“Companies that made picks and shovels to enable the 20th century Gold Rush” is how Greenberg described the current stage of the sector, despite the fact that the technology is probably years away from maturity.

In order to build essential technologies, including “dilution refrigeration,” which produces temperatures lower than those found in space, the sector is now employing. New Mexico is already home to businesses like Quantinuum, which constructed a research and development facility this year. The federally financed Quantum Tech Hub and the state-supported Roadrunner Quantum Venture Studio support these initiatives.

In addition, New Mexico Governor Michelle Lujan Grisham stated in early September 2025 that the Defense Advanced Research Projects Agency (DARPA) would provide $120 million to assist businesses in delivering proofs of concept for quantum computing.

Greenberg emphasized that in order to keep lucrative businesses and highly qualified researchers from leaving additional Mexico, the Legislature had to enact additional incentives. Similar to the Senate Bill 211 that was unsuccessful before, the proposed law would allow businesses and individuals who invest at least $3 million in quantum facilities to earn up to 30% of their investment back in the form of tax credits, up to a maximum of $50 million per facility.

If the state had received a National Science Foundation (NSF) grant, the bill’s total authorized spending could have reached $150 million, however New Mexico was not one of the 15 finalists for the program. According to Greenberg, the entire $150 million is necessary to retain talent, promote innovation, and surpass other states that want to establish their own quantum industries.

He emphasized that the state has “captured almost none of that economic development” despite the fact that the intellectual property that is worth billions of dollars was created in New Mexico, notably through breakthroughs from Sandia National Laboratories and the University of New Mexico.

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Federal Shutdown Creates Critical Food Assistance Gap

The 28-day U.S. government shutdown has raised concerns about the national safety net as federal Supplemental Nutrition Assistance Program (SNAP) funding is expected to run out on Saturday, affecting one in eight Americans. The government expects to stop replenishing SNAP debit cards on November 1.

Democratic Attorneys General and governors from 22 states and DC sued to preserve SNAP benefits using a $5 billion federal contingency fund on October 28, 2025. For vulnerable families, federal funding for WIC and several Head Start preschool programs is being curtailed. In October, the Trump administration reallocated $300 million to save WIC, although it could expire on November 8. Over 6 million low-income women and children receive WIC assistance in buying healthy foods.

Many states, including New Mexico, are rushing to develop ways to aid recipients in light of the possible suspension of food assistance. The state of New Mexico is “evaluating all options to make up food assistance,” according to Governor Lujan Grisham. Food banks are getting ready for a huge increase in demand that they will have to deal with in addition to less federal funding.

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The ‘Innovation Tax’ Crushing US Startups

Changes to IRS Section 174 under the 2017 Tax Cuts and Jobs Act (TCJA) have created a “existential crisis” for small businesses nationwide that depend on research and development (R&D), adding to the economic instability. Often referred to as the “Innovation Tax,” this provision mandates that R&D expenses be spread out over five years for domestic operations instead of being promptly written off in the year they are incurred.

This strategy is disastrous for university spin-offs and pre-revenue firms, many of whom are entirely supported by federal Small Business Technology Transfer (STTR) or Small Business Innovation Research (SBIR) funding. In the past, there was no tax obligation associated with grant funds used for research and development. Since federal grants forbid utilizing grant monies to pay federal taxes, businesses are now required to pay taxes on income that is solely used for required R&D expenses, which frequently results in tax bills they cannot afford.

According to entrepreneurs, this shift puts them at risk of going bankrupt. One CEO, for instance, mentioned that his company’s vital work on antimicrobial resistance was in jeopardy since they were faced with a $40k tax bill when they would have simply paid a couple thousand. The significant tax responsibility for pass-through businesses (such as LLCs) is transferred straight to the owners or partners. One entrepreneur reported that his personal tax burden from the amortization was more than double his take-home income.

This was because he drew a minimal personal wage to maximize grant utility. The legislation change, according to another CEO, proved “fatal” to their company, causing it to close and resulting in huge personal tax obligations for the owners.

It is predicted that the approach will force thousands of federally supported, high-merit businesses into bankruptcy, reducing America’s global influence and delaying the development of innovative treatments. The United States could lag behind international rivals like China, which provides a 200% deduction for R&D spending, if Section 174 is not addressed. Every state is expected to see a decline in R&D spending and highly paid positions; in New Mexico alone, these losses are expected to total $10 million annually and result in the loss of 176 highly paid jobs.

Other Local News Briefs

According to linked local news, “Project Jupiter” is a scenario that pits New Mexico’s limited natural resources against the demand for data. Separately, the Department of Public Safety (DPS) is being sued by an open government organization in New Mexico for delaying and refusing requests for public data. Legislators in New Mexico are also getting ready to introduce measures for reforming the state’s alcohol tax in the upcoming 2026 session.

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