Europe risks falling behind in quantum if governments don’t change their funding models for companies developing the technology, says Mark Thompson, cofounder and chief technologist at the world’s best-funded quantum startup, PsiQuantum.
Partnerships between publicly-funded institutions and private companies — which can supply startups with huge amounts of capital and access to state-of-the-art facilities — are currently “much easier” to secure outside of Europe, he tells Sifted.
Those sorts of deals can be critical for startups developing hardware for promising but theoretical tech like quantum, where R&D costs are high and revenue opportunities are limited.
PsiQuantum — which was founded in Bristol, UK, in 2015 but relocated to Silicon Valley a year later — is trying to build a working quantum computer. Over the years, it’s raised $1.3bn from investors including Atomico and BlackRock and signed two public-private partnerships with governments in 2024.
Neither were in Europe. One was a deal that will see Australia invest more than $600m into the company and the other a joint venture with the state of Illinois in the US to invest hundreds of millions of dollars into a quantum facility.
“It’s very hard to make things like that happen in Europe,” says Thompson. “For these big capital and infrastructure heavy projects, you need that public-private partnership to make them work.”
Watershed moment?
While scientists expect that quantum will deliver groundbreaking computational power once fully developed, moving the tech from theoretical to practical has been difficult.
Qubits — the quantum equivalent of bits in a normal computer — only hold their quantum state for very short periods, resulting in errors that limit the size and performance of the machines.
A recent Google breakthrough, announced in December last year, managed to get qubits to maintain their quantum state for one ten thousandth of a second. It was five times better than the performance of the company’s previous hardware.
It was a “watershed moment” and gave a lot more credibility to quantum, says Thompson.
But commercial use cases for quantum are still years off. Nvidia’s Jensen Huang recently said it would be two decades before the tech had practical uses. Thompson, predictably, is more bullish. He thinks PsiQuantum will have practical uses by the end of the decade.
“Europe is falling behind”
How fundamental European startups will be to any eventual practical breakthrough remains to be seen.
Startups building hardware for quantum computers need “significant amounts of investment to even compete in the space”, says Thompson. And that’s far harder to come by in Europe than the US.
“Getting a substantial amount of funding is not easy in Europe,” he tells Sifted — adding that the reason PsiQuantum initially moved to the US was for funding opportunities. “The risk-reward appetite of Silicon Valley is starkly different.”
The best-funded European quantum startup is Finland’s IQM, which is building both hardware and software, and has raised $210m, according to Dealroom — a fraction of the investment PsiQuantum has picked up.
There are government-backed funding programmes for quantum in Europe. In 2023 Germany announced a €3bn package to be invested over three years and the UK announced it would invest £2.5bn over 10 years.
But European funding initiatives don’t show the same level of ambition as counterparts in Australia and the US, Thompson says.
“Europe is falling behind,” he tells Sifted. “The funding strategy governments have taken has been like funding academic research. They’ve been spreading it around everywhere, which is typically what you do in academia, as opposed to being focused and decisive about where the money is being spent.”
The EU’s Quantum Flagship Fund, for example, was established in 2018 with €1bn to distribute to 5,000 researchers over the following decade.
How Europe can compete
One area that Europe could compete in is quantum software — where the cost to build products is relatively low compared to hardware, Thompson says.
“The application of quantum computers — looking at how you deploy quantum computers to solve critical problems — is a good opportunity for non-hardware based companies,” he tells Sifted, specifically pointing to quantum application layer-building company Phasecraft and error correction startup Riverlane.
Europe is also one of the best places for quantum talent globally, Thompson adds. “Europe very early on had incredible training programmes for quantum scientists and engineers.” He points to the UK’s National Quantum Technologies Programme, which was set up in 2013 and helped to establish quantum hubs at UK universities.
The quantum talent shortage, however, is only going to get worse, Thomspon says — as demand increases. He predicts another record year of funding in the sector in 2025; startups raised $2.2bn in 2024, globally — the sixth consecutive year the figure had grown.
That rising interest means there’s more competition for top talent in the sector — and demand is already outstripping the speed that academic institutions are spitting out trained quantum engineers.
“The overall hype around AI just gets more investors on the periphery of the sector interested in quantum,” he tells Sifted — as the future of compute becomes front of mind for many VCs.
Read the orginal article: https://sifted.eu/articles/psiquantum-europe/
