How Governments Are Building Quantum Computing's First Market

Firgun Ventures is a VC firm investing in Series A/B quantum scale-ups globally.

Governments are central to shaping quantum computing's first market, acting as investor, customer, and referee at once. Governments across the globe announced US$11.4 billion in new quantum funding during 2025 alone, led by Japan (US$7.4 billion, including chip design), the US (US$1.7 billion), and the UK and Spain (about US$900 million each), and was more than five times the 2024 total. Alongside research grants, a growing share of that money now works like early customer spending, paying companies to deliver machines and services.

Quantum companies need manufacturing capacity, early buyers, trained users, and credible evidence of progress, and few private customers will supply all four while the magnitude of return-on-investment remains uncertain. Governments have strong reasons to fill the gap, as countries hosting the expertise and supply chains stand to capture a disproportionate share of the value once the companies mature. Security adds urgency, since a sufficiently powerful quantum computer could break the public-key encryption protecting banking and state communications, and few states would risk depending on others for capability, talent, and strategic warning. Governments are, in effect, constructing quantum computing's first demand curve, by commissioning machines, funding the factories that build them, buying the first systems, training their users, and supporting the companies meeting that demand by setting the tests that decide which approaches earn further support.

States Underwrite the Engineering and the Factory

Before quantum computers can be bought at scale, the transition from laboratory prototypes into reliable products needs to be funded, and governments are increasingly footing that cost. In the US, the Department of Commerce has finalised CHIPS and Science Act awards of up to US$1 billion for Anderon, IBM's new quantum wafer foundry, and up to US$375 million for GlobalFoundries from a US$2 billion package, while D-Wave, Rigetti, and Quantinuum each signed agreements for up to US$100 million that hand the Commerce Department a minority equity stake. This makes Washington a funder and, in several cases, a part-owner, with a say in which manufacturing problems get fixed first and where the factories are built.

Europe pursues the same goal through procurement. France's defence-led PROQCIMA programme signed framework contracts worth up to €500 million (US$580 million) with Alice & Bob, C12, Pasqal, Quandela, and Quobly to develop fault-tolerant prototypes, while its 2032 target has since been raised to two universal quantum computer prototypes with 1,000 logical qubits. A public body effectively becomes an early paying customer for engineering work, giving selected suppliers revenue, technical milestones and a defined route towards industrialisation years before fault-tolerant quantum computing arrives.

Public Buyers Form Quantum's First Installed Base

Before quantum computers can be bought at scale, public research institutions have been among their earliest outright buyers, since national laboratories and supercomputing centres already have the budgets, infrastructure and technical expertise needed to operate them. The EuroHPC Joint Undertaking has procured six quantum computers and co-funded two more, installing them beside supercomputers so classical systems can orchestrate the wider computation while quantum processors execute selected subroutines. This hybrid arrangement is one of the most practical near-term routes for putting quantum processors into working computing infrastructure, making these sites important proving grounds for how the technology will ultimately be used.

Finland shows how sustained public demand can carry a supplier across hardware generations. Finland’s VTT Technical Research Centre and IBM jointly developed successive 5-qubit, 20-qubit, and 50-qubit systems through a tender to deliver 150-qubit and 300-qubit systems backed by a €70 million (US$81 million) grant. IQM had sold 26 systems and delivered 17 by June 2026, and while public demand did not fund every sale, it gave IQM an early reference customer and a development path that fed directly into its commercial product line.

Building the Users Before the Market Arrives

Machines create little lasting demand without organisations that know what to ask of them, so governments are also funding the formation of users. Australia's Critical Technologies Challenge Program has advanced Silicon Quantum Computing (SQC) (a Firgun Ventures portfolio company), Schneider Electric, and UNSW Sydney to its second stage with A$3.6 million (US$2.5 million), testing whether SQC's quantum-enhanced AI chip can improve household energy forecasting. The partners report a 20% average accuracy gain over a classical benchmark during Stage 1, an early result, yet to be independently replicated, but the kind of measurable outcome that gives an industrial partner reason to invest further.

Shared infrastructure widens that funnel further. Japan's National Institute of Advanced Industrial Science and Technology (AIST) opened its Fujitsu and QuEra systems to external users in March 2026. Israel's Quantum Computing Center (IQCC), set up by Quantum Machines with NIS 100 million (US$29 million) from the Israel Innovation Authority, similarly gives industry and researchers access to multiple quantum technologies alongside classical high performance computing and an open hardware testbed. Each experiment on infrastructure like this can create a more technically informed potential buyer.

Independent Verification Decides Which Approaches Advance

Public money increasingly arrives with a test attached, changing how companies compete in a field where roadmaps and qubit counts are hard to compare and harder still to verify. The US Defense Advanced Research Projects Agency’s (DARPA) Quantum Benchmarking Initiative substitutes independent scrutiny, asking whether any architecture can reach utility scale, where computational value exceeds cost, by 2033. DARPA’s US$125 million expanded agreement with PsiQuantum funds hands-on verification of its hardware designs, fabrication processes, system performance and supporting infrastructure. The US Department of Energy's Quantum Genesis Q Competition provides smaller awards for early milestones, but reserves its largest incentive pool for companies that demonstrate scientifically relevant fault tolerant machines with at least 100 logical qubits. A separate US$45 million programme will equip national laboratories to validate those claims. Much as staged clinical trials decide which drug candidates advance, these programmes are helping to make independently verified capability, rather than raw qubit counts alone, a more important signal for investors and customers trying to distinguish credible contenders. Europe applies similar discipline through staged procurement that narrows the field. In the UK, the ProQure programme’s first phase offers up to 10 first-phase contracts of up to £14 million (US$19 million), each project requiring an operational testbed for independent evaluation. This is ahead of a potential procurement beyond 2030 worth up to £1 billion (US$1.3 billion). Each selection can therefore carry weight beyond the immediate contract, directing further public funding and adding an external signal of technical credibility to the approaches that advance. The tests are not purely technological, however. Both programmes also value domestic capability, supply chain resilience and technological sovereignty, criteria that may favour suppliers or architectures differently from a purely commercial procurement.

Why Quantum Has Become a Matter of National Strategy

When Denmark's state investment fund EIFO and the Novo Nordisk Foundation committed €80 million (US$93 million) to QuNorth, which will own the Magne machine supplied by Atom Computing and Microsoft, the announcement explicitly cited “massive American and Chinese investment” and the “risk of Europe falling behind”. On security, protection against a code-breaking machine comes from post-quantum cryptography (new encryption running on conventional computers), so owning a quantum computer does not itself protect existing encryption, though national expertise helps judge how fast the threat approaches.

Governments are therefore building both sides of the quantum market at once, financing suppliers to produce machines while equipping laboratories, companies, and researchers to access and use them. That foundation can help carry the industry through the years before fault tolerant, but much of it arrives as time-limited grants, competitions, and one-off purchases. Industries such as defence have suppliers who thrive with the state as their main customer because its budgets recur for decades. Unless and until quantum earns comparable standing procurement, quantum companies will need private customers to accelerate their revenue. As verification milestones fall due later this decade, the companies best placed will be those using government contracts as a bridge to commercial customers, since the next demand curve will be drawn by buyers spending their own money.