Despite a general downturn in technology investments, the decline in quantum technology funding is not attributed to dwindling interest. In 2023, quantum investments outside the US demonstrated resilience, with governments stepping in to provide significant national quantum funding commitments. This report, enriched by comprehensive interviews with a variety of enterprise end users, vendors, and research institutions, including HSBC, Dell, Federal Reserve, Citi, and Moderna, analyzes TQI investment data and tracks progress in national quantum computing centres in Europe and North America.

The report's primary goal is to elucidate key themes surrounding the adoption of quantum computing use cases and national quantum strategies, its interaction with AI, and strategies for developing quantum readiness. TQI's latest data indicates significant trends, including:

• A 50% decline in venture capital for quantum startups globally from $2.2 billion in 2022 to about $1.2 billion in 2023. However, Europe, the Middle East, and Africa saw a 3% growth, while the United States and the APAC region experienced substantial decreases.
• Over 30 governments have pledged more than $40 billion in public funding for quantum technologies over the next decade.
• More than 20 of these governments have established coordinated policies, funding, and roadmaps for quantum technologies.
• National labs and quantum computing centres are accelerating practical applications, with dedicated centres and hubs emerging.
• Government funding commitments to quantum are estimated to be twice the peak of quantum VC investment in 2022.

Interviews with key figures across the quantum value chain revealed:

• Developing internal quantum expertise and readiness is increasingly prioritized by sectors like financial services and pharmaceuticals.
• Experts agree on the short-term significance of quantum hybrid systems in unlocking immediate business value.
• While not a ‘quantum winter’, the investment landscape is cooler, and startups must manage their funding roadmaps prudently.
• Governments are key in providing long-term backing for quantum, countering high initial R&D costs.
• Artificial intelligence and quantum computing are mutually beneficial technologies, but care must be taken to ensure AI hype does not overshadow quantum.

Preparing for the quantum era

Over 300 end users in sectors like healthcare, financial services, and material sciences are already exploring use cases and building quantum readiness. With quantum advantage potentially years away, these organisations are proactively preparing for the quantum era.

Dr. Jan Goetz, CEO and Co-founder of IQM Quantum Computers, commented: “2023 was a year of steady technological progress, resulting in larger qubit counts and initial error correction, as companies successfully published and followed quantum roadmaps. We also saw real systems deployed in national labs, steadily crossing into practical applications as we continue the journey to full-scale commercial problem-solving.

“However, the algorithmic side remains less predictable. While scaling processors is largely an engineering challenge, estimating timelines for software improvements is more dependent on hardware progress. Still, in 2023, we observed more contributions from non-quantum experts like systems engineers, bringing valuable real-world experience and bringing us closer to solving the talent bottleneck.”

Ekaterina Almasque, General Partner at OpenOcean, said: “While venture funding temporarily cooled, our research confirms the steady momentum towards the quantum era. The findings signal that 2024 can become a year of growing confidence in quantum computing's potential, despite still a relative lack of private capital flowing into that space. Significant use cases emerging to unlock its commercial promise. Having said that, achieving widespread adoption requires a full quantum technology stack to evolve.

“We have a chance to establish trillion-dollar quantum software leaders, but only by ensuring hardware, algorithms and interfaces serve particular real world use cases. As macro conditions evolve, pragmatic innovation focused on quantum-business fit will be key. Many industries that are not preparing for the quantum era would risk falling behind in the quantum future.”

Stephen Nundy, Partner & CTO at Lakestar, said: “The quantum hype cycle climbed quickly and has recalibrated back closer to reality. But the greater collaboration emerging between software and hardware players on bridging immediate needs reaffirms that quantum-readiness remains an inevitability.

“To fully realise quantum's potential, we must take a strategic, full-stack approach – ensuring hardware, software, interfaces, and talent develop in harmony. This requires actively partnering with corporate end-users to understand commercial needs and co-create domain-specific solutions. If we can come together to solve these engineering challenges, the chance remains to build the next era's leading multi-billion-dollar quantum corporations.”

Click here to read the report.