On October 1, German chancellor Olaf Scholz descended on the city of Ehningen, south-western Germany, for the inauguration of IBM’s first quantum data centre in Europe. It is the first location to host Heron, the company’s most powerful quantum processor to date, outside the US. It is an investment worth approximately €290m.

The German economy and its chancellor are both experiencing turbulence. However, the country’s goal to become a leader in quantum technologies, which is backed by about €3bn in public support until 2026, is likely to survive a potential changing of the guard in Berlin. The who’s who of German industry was in attendance at the IBM event — from E.On to SAP, from Bosch to Volkswagen and T-Systems. 

Investments into quantum computing are picking up as the technology achieves incremental breakthroughs that conspire to achieve scalability and overcome ‘noise’, making quantum computing actually useful and unlocking billions in business value.

Bets are being made by governments looking to ensure future prospects of ‘technological sovereignty’, such as the eyebrow-raising A$940m ($620m) in financial support for PsiQuantum to build a large-scale quantum computer in Queensland, Australia. The Palo Alto-based company has also received £9m from the UK government for an advanced research and development facility in Daresbury in the north-west of England. 

Meanwhile, Germany’s cyber agency Cyberagentur has committed €35mn to the UK’s Oxford Ionics, Australia’s Quantum Brilliance and Munich-based neQxt to deliver a portable quantum computer by 2027. Denmark’s Export and Investment Fund — as well as Pension Denmark — has invested into Californian Atom Computing, successfully attracting the American company’s European headquarters. 

Private capital, although less readily available in Europe than the US, is also flowing to the sector. Among others, France’s Pasqal secured significant funds from Singapore’s Temasek last year, and has been chosen by Aramco to deliver Saudi Arabia’s first quantum computer by the second half of 2025. 

As with any deep tech endeavour, the return horizon on quantum computing is much further in the distance than for that of, say, AI software. But for those willing to wait it out, the rewards could potentially be tremendous.

Boston Consulting Group in 2024 reaffirmed its forecast that quantum computing will create $450bn to $850bn of economic value, sustaining a market in the range of $90bn to $170bn for hardware and software providers, by 2040. 

However, BCG also said its previous view of commercial value in the so-called NISQ (Noisy-Intermediate Scale Quantum) era had been ‘optimistic’. This means that while the technology still holds tremendous promise, actual commercial use cases, or so-called quantum utility, remain elusive. 

Quantum computers promise to unleash breakthroughs in areas like drug discovery, cryptography, finance and logistics. However, today’s small-scale machines remain prone to errors, and the technological approach by which to reach quantum advantage is still in contention. 

The concept of universal fully fault-tolerant quantum computing is still years in the making (Quantinuum, among others, has a roadmap targeting 2030). In the meantime, architecture-agnostic software can optimise current smaller-scale machines to run simulations as a side job for classical systems. Recently, Australian quantum software infrastructure start-up Q-CTRL raised $113m in Series B funding, led by GP Bullhound. 

There is also a whole market built around getting businesses and organisations ‘quantum ready’, providing hardware to practise on for when quantum utility becomes a reality — and those tapping into it are already generating significant revenue. 

But even with supportive government policies and software optimisation, commercial use cases remain minimal and technology timelines uncertain. Ultimately, surfing the quantum investment wave remains not for the faint of heart. 

However, for those who are patient and choose wisely, there is not only potentially substantial returns to be won, but also the added prestige of having ushered in a new era of computation as we know it. 

Linnea Ahlgren is a senior editor at TNW.

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This article first appeared in the December 2024/January 2025 print edition of fDi Intelligence