Innovation Lightbulb: Private Investment in Quantum Technology

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The quantum information science and technology (QIST) field is transitioning from a focus on theoretical research to a burgeoning industry with practical market applications, with the potential to significantly advance frontiers in computing, green energy, medical research, and national security. A variety of tech companies are already positioning themselves to harness quantum technologies, acting as early adopters and developing initial use cases.

However, despite some recent growth, these efforts to expand the industry remain limited. Private sector investment in quantum technology, which began modestly at $100 million in 2014, surged to $2.4 billion in 2021 as confidence in the technology grew. These investments have since declined, dropping to $1.3 billion in 2023 and further to $1.1 billion in 2024. Globally, investments decreased by 50 percent, from $2.3 billion in 2022 to about $1.3 billion in 2023. The U.S. experienced an 80 percent decline, while the Asia-Pacific Economic Cooperation (APEC) region saw a 17 percent drop. In contrast, investments in Europe, the Middle East, and Africa saw a modest increase of 3 percent. These overall declines can be attributed to various factors, including economic recessions, market adjustments, geopolitical risks, and shifts in investment strategies.

The U.S. government has supported the growth of a domestic quantum technology industry through the National Quantum Initiative Act (NQIA). NQIA nearly doubled federal spending on quantum information science (QIS) R&D between FY 2019 and FY 2022 to more than $900 million per year. This investment has also catalyzed private sector investment in QIS R&D, which increased by $6 billion since the establishment of the National Quantum Initiative.

Steady, long-term public and private investments will be crucial to scale up R&D activities, expand business operations, attract top talent, build up infrastructure, and establish a robust quantum industry in the U.S. Reauthorizing the National Quantum Initiative Act, which expired in 2023, and full appropriation of the science portion of the CHIPS Act are needed to secure the future of this strategically important emerging industry in the United States.

Data visualization by William Taylor

The author would also like to thank Julia Yoon, a research intern, for her logistical support.