SAN FRANCISCO, May 20, 2024. At an event convened recently by In-Q-Tel (IQT) and Silicon Valley Bank (SVB), a division of First Citizens Bank, a group of 40 company founders and investors met to discuss ways to further advance quantum technologies and identify opportunities for closer collaboration. The attendees, who came from the U.S., Europe, and Asia, included top executives from many of the leading venture capital-backed startups in the fields of quantum computing, quantum networking and communication, and quantum sensing. (A full list of the venture-financed companies represented is at the end of this release.) Collectively, these businesses have raised a total of $1.4 billion.

Among the key takeaways from the event were the need for more diverse and secure quantum supply chains, for more industry collaboration in areas such as interoperability, and for greater access to government funding for young companies developing quantum technologies.

The discussions highlighted the impressive efforts under way to create powerful commercial applications, from the potential use of quantum sensors to advance oil exploration to employing quantum computers to discover new drugs for treating cancer and other diseases. They also underlined the importance to national security of technologies such as ultra-secure quantum communications networks at a time when China is investing many billions of dollars a year in various quantum domains.

“We’re on the cusp of the greatest shift in computing since the advent of the PC,” said Gerald Brady, a Managing Director at SVB. “However, the technology lead in quantum that the U.S. has relative to China has halved over the last five years, given the level of state support for quantum research and startups in China. The degree of collaboration and openness to come together as a group of startups and investors is a great start, but we are in an intense technology race which requires capital.”

An important topic of discussion was quantum supply chains, which are still at risk because of startups’ heavy reliance on sole suppliers for some key components and also on suppliers from countries whose interests are not aligned with those of Western democratic nations. There was widespread recognition at the meeting of the need to create new and more reliable sources of key components, such as cryogenic refrigerators, that can be used by multiple companies.

There was also considerable interest, even amongst direct competitors, in finding more ways to collaborate to advance the quantum industry as a whole. In particular, there was a feeling that while ensuring the interoperability of quantum systems is hard, finding innovative ways to achieve this is essential. Participants were particularly enthusiastic about the potential to develop common optical networking protocols that could help link together quantum computers and sensors.

Another key issue that emerged was that little of the U.S. government funding allocated so far to support the quantum industry is finding its way to innovative startups. Only a couple of firms present said they had been able to access money from official programs. Attendees noted that public funding to support quantum innovation was more readily available in Europe and stressed that the U.S. government’s procurement of quantum tech was still at a very low level.

Participants also noted that, as the industry evolves from the early days of strong venture interest and support, generative AI and other emerging technologies are increasingly diverting venture capitalists’ attention and funding away from the sector, making it all the more important for the U.S. government to support quantum tech—especially in light of the significant investment China is making in the field, which dwarfs that of other Western nations.

“Quantum technology holds immense promise for groundbreaking advancements in fields like cybersecurity, artificial intelligence, and materials science,” stated George Hoyem, Executive Vice President Investments at IQT. “With China projected to allocate over four times the amount of money towards quantum than the U.S. is currently targeting, we must double down on supporting quantum companies as well as research and development in the next five years.”

More robust government support for the quantum industry—as well as greater industry efforts to collaborate on supply chain issues and areas such as interoperability—will help ensure the technology achieves its exciting potential. As one of the attendees at the event put it: “what matters isn’t that any particular company wins; it’s that quantum wins.”

Venture-backed quantum companies in attendance: AOSense; Atom Computing; Atomionics; IonQ; Maybell Quantum; memQ; Q-CTRL; QC Ware; QphoX; QunaSys; Qunnect; Rigetti Computing; SandboxAQ; and Universal Quantum.

‍