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Investors threw 50% less money at quantum last year

Jan 31, 2024 - theregister.com
Quantum companies saw a 50% decrease in venture capital funding last year as investors shifted their focus to generative AI and avoided risky bets on Silicon Valley startups. The State of Quantum report revealed that investment in quantum technology fell from a high of $2.2 billion in 2022 to about $1.2 billion last year. The decline was particularly stark in the US, with an 80% drop in venture capital for quantum. Despite this, the report denies the arrival of a "quantum winter," attributing the decline to broader venture capital trends and insisting that the quantum industry continues to progress, albeit at a slower pace.

The report also highlights that quantum projects are increasingly expected to show a "roadmap to revenue" before attracting more investment. It notes that while some quantum startups went public prior to 2023, only one did so last year, and some of those that did have seen declines in their share prices. However, government-backed projects and research centers are helping to fill the funding gap. The report concludes that while the quantum "advantage" is still five to 20 years away, the challenge for quantum companies will be to keep interest and investment alive in the interim.

Key takeaways:

  • Investment in quantum technology fell from $2.2 billion in 2022 to about $1.2 billion last year, with a significant decline in the US and APAC region, but a slight growth in the EMEA region.
  • Despite the decline in funding, the quantum industry continues to progress towards useful quantum systems, albeit at a slower pace.
  • Government backed projects and research centers have stepped up to fill some of the shortfall in funding, ensuring that quantum computing continues to make progress.
  • While the quantum "advantage" and its practical utilization are between five to 20 years away, an increasing number of organizations are aiming to develop their expertise and upskill their workforce in quantum know-how in order to be ready for when the technology takes off.
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