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The field of quantum computing, long heralded as a transformative technology, continues to make significant strides despite a challenging investment landscape. The 2024 State of Quantum report, developed by IQM Quantum Computers, OpenOcean, and Lakestar in partnership with The Quantum Insider (TQI), offers a comprehensive overview of the current status and future outlook of the quantum computing sector.

Investment landscape: Not a quantum winter, but a cooling period

In 2023, venture capital investment in quantum startups saw a sharp decline of 50%, dropping from $2.2 billion in 2022 to approximately $1.2 billion in 2023. This decline was not uniform across regions; while Europe, the Middle East, and Africa experienced a modest growth of 3%, the United States saw an 80% drop, and the Asia-Pacific region declined by 17%. Despite these figures, the notion of a "quantum winter" is largely refuted by industry experts who attribute the slowdown to broader macroeconomic trends rather than diminishing confidence in quantum technology's potential.


"There's a broad consensus that we are not experiencing a quantum winter," says Dr. Jan Goetz, CEO & Co-Founder at IQM Quantum Computers. "It's more of a deep tech market slowdown, which has been counter-balanced by increased government investment. While private venture capital has become more cautious, public funding commitments have stepped in to fill the gap, demonstrating continued faith in quantum's long-term potential."

Government Funding: An Essential Backbone

Governments around the world have recognised the strategic importance of quantum technologies, committing over $40 billion in public funding over the next decade. More than 30 governments have formalised coordinated policies and funding roadmaps to support the development of quantum technologies, doubling the annual funding commitment to the sector compared to the peak of venture capital investments in 2022. National labs and quantum computing centres have become hubs for innovation, fostering collaborations between public bodies, researchers, and industry.


For instance, the UK National Quantum Computing Centre (NQCC) is set to open in 2024, promoting cross-sector quantum collaboration to spur growth in the UK economy. Similarly, the VTT Technical Research Centre of Finland has scaled its quantum computing resources to a 20-qubit system and plans to reach 54 qubits by the end of 2024, focusing on micro- and nanotechnology.


National strategies, such as the UK National Quantum Strategy and South Korea's substantial investment in quantum technologies, underscore the critical importance of quantum computing for national security, economic prosperity, and technological sovereignty. Government funding provides a stable backbone for the industry's continued growth, ensuring that research and development efforts can proceed, despite fluctuations in private investment.

Technological Advances and Industry Adoption

The past year has seen notable technological advancements in quantum computing. Researchers and commercial entities have made significant progress in error correction, a critical hurdle for practical quantum computing. For instance, Harvard-led teams executed large-scale algorithms on an error-corrected quantum computer, moving timelines for quantum fault tolerance forward.


Several national and international projects have also come to fruition. Finland's VTT Technical Research Centre and IQM completed a 20-qubit quantum computer, reinforcing Finland's leading position in the field. The OpenSuperQ Project, an international collaboration, aims to construct an open superconducting quantum computer, potentially democratising access to quantum resources.

IQM: Leading Europe's Quantum Charge

IQM Quantum Computers, a leading European quantum computing company out of Finland, has been at the forefront of these advancements. Awarded at Deep Tech 2021 and selected on the Tech Tour Growth50 Europe 2023 and 2024 lists of potential unicorns, IQM has demonstrated consistent growth and innovation. In 2023, the company received the EIC Scaling Impact Award, further solidifying its position in the quantum ecosystem.


IQM's contributions include the development of IQM Radiance™, an upgradable quantum computing platform designed for businesses, high-performance computing centres, data centres, and governments. The platform offers 54- and 150-qubit variants, catering to various computational needs. Additionally, IQM Spark, a superconducting quantum computer, is tailored for academic institutions and research labs, aiming to nurture the next generation of quantum computing experts.

The Confluence of Quantum and AI

One of the key themes of the 2024 State of Quantum report is the synergy between quantum computing and artificial intelligence (AI). While AI has overshadowed quantum technologies in terms of immediate business impact, the potential for these two fields to complement each other is immense. Quantum computing could enhance AI by accelerating high-performance computing tasks, such as generative chemistry and digital twin simulations. Conversely, AI could help overcome some of the technical challenges in developing quantum computing.

Collaborations and Expansions

The year also marked significant collaborations and expansions in the quantum computing sector. IonQ, a provider of trapped-ion quantum computing, expanded its partnership with Hyundai Motors to harness quantum computing for automotive innovation. This collaboration aims to revolutionise vehicle design and production processes, leveraging quantum computing's capabilities to solve complex problems in materials science and optimisation.


In Finland, the collaboration between VTT Technical Research Centre and IQM led to the existence of the country's second quantum computer. This 20-qubit system reaffirms Finland's leadership in quantum technology and highlights the importance of public-private partnerships in advancing the field.


Additionally, the OpenSuperQ Project, a collaborative international effort, embarked on the ambitious goal of constructing an open superconducting quantum computer. This initiative aims to democratise access to quantum resources, fostering innovation and collaboration across borders.

Capital Market Pullback: A Temporary Setback?

While the investment landscape has cooled, the long-term outlook for quantum computing remains optimistic. Funding rounds in early 2023 started strong but began to trail off by mid-summer, reflecting the broader venture capital market's sluggishness. However, several companies secured substantial investments to fuel their growth.


For example, PASQAL, another company on the Tech Tour Growth50 List, specialising in neutral atoms quantum computing, completed a Series B funding round of €100 million. Q-CTRL, a quantum software company, raised $54 million in its Series B round, and Quantum Motion, a UK-based quantum computing scale-up, secured over £42 million in equity funding.


Despite the overall decline in venture capital investment, there are signs of a resurgence. By late 2023, analysts noted a new wave of private funds entering the quantum sector, signalling a potential restoration of venture funding for the industry. Oxford Quantum Circuits, for instance, announced a $100 million Series B round, led by Japanese venture capital firm SBI Investment, with significant government backing.

Innovation Amid Cautious Optimism

The year 2023 marked a pivotal chapter in the story of quantum technology. While venture capital investment cooled, technological advancements and government support continued to propel the field forward. The concerted efforts of academia, industry, investors, and governments provide a potent mix to drive the quantum revolution.


As we move into 2024, the quantum computing sector faces the challenge of balancing investor expectations with the need for continued innovation. Hybrid quantum systems, combining classical and quantum computing, offer a pragmatic approach to unlocking immediate value for businesses. The journey to fully functional, fault-tolerant quantum computers is a marathon, not a sprint. With strategic investments, technological advancements, and strong public-private partnerships, the quantum computing sector is positioned to address some of the most complex challenges facing humanity.


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