2025 Analysis
| Assessment: U.S.-Lead | Confidence Interval: Moderate |
| Direction: Trend Contested | Confidence Interval: Moderate |
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The United States Leads in Quantum Innovation but China’s Investment Is Substantial
Current quantum computing technology remains nascent, with a projected 5-10 years before commercialization. As a result, much of the ecosystem is focused on research and development towards the creation of a commercially-viable, fault-tolerant quantum computing system. Currently, the top two countries in quantum computing are the United States and China. The United States maintains advantages in first-mover and private sector innovation and international collaboration; however, China’s massive government investment and policy strategy suggest an intensifying race for quantum advantage.
The United States holds a commanding lead in demonstrating practical quantum advantages and building a robust innovation ecosystem. In addition to showcasing quantum advantages for scientific progress in drug discovery, U.S. companies are making progress towards fault tolerant computing with Microsoft’s recent development of 12 entangled logical qubits marking a significant step in error correction of quantum computers.[1] The United States continues to dominate in many of the top quantum computing modalities, building on foundational algorithms like Shor’s Algorithm developed by American researchers.
However, China has made notable strides, particularly on building upon existing quantum theoretical breakthroughs and patent application filings. While U.S. researchers demonstrated time crystals within a quantum system in 2021[2] — an achievement that may help to create a room-temperature quantum computer — a PRC research team successfully actualized room temperature time crystals in 2024.[3] China also now leads in production of quantum computing papers, accounting for 22.8% of global papers compared to the United States’ 21.3%; however, further analysis reveals that the U.S. publishes significantly more high-impact, meaningful quantum computing research.[4]
China has largely focused on quantum communications, but has since established quantum computing as a strategic priority since 2021, outlining it in the 14th Five-Year Plan.[5] Meanwhile in the United States, Congress passed the National Quantum Initiative Act in 2018 which for the first time created a coordinated, federal-level effort to advance quantum information science and technology. .[6]
Source: Hodan Omaar & Martin Makaryan, How Innovative Is China in Quantum?, Information Technology & Innovation Foundation (2024).
The United States leads decisively in private sector engagement, with approximately 300 quantum startups compared to China’s 30, and 320 quantum investors versus China’s 50.[7] This vibrant private ecosystem also complements research efforts from U.S. public research institutions. China’s quantum development remains heavily centralized around state institutions, like the University of Science and Technology of China (USTC), though it has produced notable achievements through private companies like Origin Quantum. They’ve produced the Wukong system, but this system falls short of systems produced by top U.S. companies, like IBM’s 1000-qubit Condor supercomputer.[8]
Government funding shows China’s strategic prioritization of quantum technology, with projected investments of $15 billion compared to the U.S.’s $4 billion.[9] However, when including private sector investment of the two countries, the gap narrows significantly. The United States has secured approximately $3.7 billion in private quantum funding versus China’s $255 million.[10]
Wildcards
- Will U.S. Quantum Export Controls Impact Small Companies and Research Partnerships? The recently proposed $2.7 billion renewal of the National Quantum Initiative Reauthorization Act signals sustained U.S. commitment to maintaining its quantum edge.[11] Additionally, recent U.S. export controls passed in September require licenses for the export of key quantum equipment, materials, and software, with additional disclosure requirements for foreign nationals working on these technologies in the United States.[12] Despite these controls aiming to prevent adversaries from gaining access to top quantum technology, these controls may potentially burden smaller U.S. quantum companies with compliance costs and complicate international research collaborations.
What to Watch
- Quantum Software and Algorithm Development. Hardware constraints continue to impede quantum computing’s commercialization, prompting researchers to intensify software and algorithm development while awaiting hardware improvements. The United States has been a pioneer in quantum algorithm research, notably developing Shor’s and Grover’s algorithms, with private sector entities driving innovation — such as companies like Phasecraft and IBM’s Qiskit software platform.[13] Emerging developments in quantum algorithms include advances to quantum optimization algorithms and quantum machine learning approaches.
- United States Takes Early Lead in Logical Qubit Development While China Accelerates Investment. The race for logical qubits represents a critical metric for quantum computing progress. While physical qubit counts continue to grow, the ability to implement error correction and achieve reliable quantum operations through logical qubits will likely determine practical quantum computing capabilities. The United States currently leads in this crucial area, highlighted by Google’s December achievement in stabilizing logical qubits with their Willow chip.[14]This breakthrough, which significantly reduces error rates through advanced error correction, could set a new benchmark for quantum computing. However, China’s substantial investments in the field could accelerate their progress and narrow the quantum computing gap.
[1] Cierra Choucair, Pasqal and Qubit Pharmaceuticals Use Neutral Atom QPUs to Predict Water Molecule Behavior in Drug Discovery, Quantum Insider (2024) and Matt Swayne, Microsoft-led Team Achieves Record for Reliable Logical Qubits in Quantum Computing, Quantum Insider (2024).
[2] Taylor Kubota, Stanford Physicists Help Create Time Crystals with Quantum Computers, Stanford Report (2021).
[3] Matt Swayne, It’s About Time Crystals: Research Team Uses Time Crystals as Quantum Computer Controls, Quantum Insider (2024).
[4] Hodan Omaar & Martin Makaryan, How Innovative Is China in Quantum?, Information Technology & Innovation Foundation (2024).
[5] Rogier Creemers, et al.,Translation: 14th Five-Year Plan for National Informatization, DigiChina (2022).
[6] National Quantum Initiative (last accessed 2024).
[7] Alex Challans, CEO of Quantum Insider, speaking at the World Quantum Congress (2024).
[8] Is Quantum Computing Underfunded in the U.S.?, IPO Club (2024).
[9] Alex Challans, CEO of Quantum Insider, speaking at the World Quantum Congress (2024).
[10] Alex Challans, CEO of Quantum Insider, speaking at the World Quantum Congress (2024).
[11] Cantwell, Young, Durbin, Daines Introduce National Quantum Initiative Reauthorization Act, U.S. Senate Committee on Commerce, Science and Transportation (2024); Science Committee Leaders Introduce Bill to Advance and Secure Quantum Leadership, Committee On Science Space and Technology (2023).
[12] Clare Zhang, US Puts Export Controls on Quantum Computers, American Physical Society (2024).
[13] Matt Swayne, Phasecraft Wins £1.2 million UK Government Contract to Develop Quantum Algorithms to Optimise Energy Grids, Quantum Insider 2024); Qiskit, IBM (last accessed 2024).
[14] Hartmut Neven, Meet Willow, Our State-of-the-Art Quantum Chip, Google Quantum AI (2024).