Quantum computing is moving beyond laboratory demonstrations towards fault tolerance, industrial-scale manufacturing and integration with conventional computing infrastructure. But as governments and technology companies commit billions to building the foundations of a quantum economy, meaningful commercial returns remain uncertain. For technology providers and decision-makers, the next phase of quantum computing will therefore be measured not only by technical progress, but by whether the investment required to build a sustainable industry can ultimately be justified.

Quantum computing has rarely lacked investment. Governments have created national programmes, technology companies have funded research teams for decades, venture capital has supported a growing collection of specialist companies, and cloud providers have made quantum processors available to researchers and enterprises around the world. What the industry has yet to demonstrate at comparable scale is return.

That distinction matters as quantum computing moves from proving that individual technologies work towards building systems that can operate reliably, integrate with conventional computing infrastructure and eventually be manufactured at scale. Fault tolerance remains one of the defining engineering challenges, but the industry is also having to build the infrastructure around the processor: cryogenic systems, control electronics, advanced packaging, fabrication processes, error correction, software, networking and data-centre integration. All of this requires capital, often years before meaningful commercial revenues can be expected.

The reported decision by NEC to discontinue its own quantum computer hardware development provides a useful example. Japanese reporting indicates that the company ended hardware development in March after concluding that the path towards practical use was unlikely to produce sufficient profits to justify continued investment. NEC has nevertheless said that it will continue to evaluate practical applications and the industrialisation of quantum technologies.

The significance is not that NEC has decided quantum computing does not work. It is that technical progress and commercial justification do not necessarily move at the same speed. A technology can continue advancing while becoming increasingly difficult for an individual company to justify funding.

The cost of building a quantum industry

IBM provides a striking contrast. In June, the company announced plans to invest more than $10 billion in quantum computing over five years, covering research and development, capital expenditure, manufacturing scale-up, acquisitions and ecosystem development. The investment supports IBM’s roadmap towards Starling, its planned fault-tolerant quantum computer for 2029.

IBM says its quantum programme has already generated more than $1.1 billion in client contracts since 2017. Even so, the scale of the new commitment illustrates how much investment will still be required to move from today’s systems towards commercially useful fault-tolerant machines.

This is increasingly about more than developing better processors. Quantum computing is beginning to encounter the industrial requirements familiar to more established technology sectors. Components need to be manufactured consistently, processors need reliable packaging and control systems, supply chains need to mature, and machines need to operate alongside conventional computing infrastructure.

One of the clearest indications of that transition came last week from the US Department of Commerce, which finalised an award of up to $375 million to GlobalFoundries under the CHIPS and Science Act. The funding will support the creation of a domestic quantum foundry serving multiple quantum architectures, together with work on cryogenic CMOS, advanced packaging and heterogeneous integration.

The language surrounding the programme is revealing. Foundries, manufacturing, packaging and integration belong to the vocabulary of an industrial technology sector rather than an experimental research programme. GlobalFoundries has similarly described quantum companies as confronting the transition from proving something in a laboratory to determining whether it can be manufactured at volume.

The company’s own expectations also demonstrate the timescales involved. Initial quantum revenues are expected to come primarily from engineering engagements over the next one to three years, with manufacturing revenues potentially becoming more significant towards the end of the decade. Manufacturing capability therefore has to be financed before the market it is intended to serve has fully developed.

Different investors are working to different clocks

This helps explain why governments are becoming increasingly important participants in quantum computing. They do not evaluate the technology using the same return-on-investment calculation as a corporate board. Quantum capability is increasingly connected with national competitiveness, scientific capacity, cybersecurity and technological sovereignty, giving governments reasons to support domestic manufacturing and research even when the immediate commercial return remains uncertain.

Europe’s investment through EuroHPC follows similar logic. Different quantum architectures are being integrated with existing supercomputing infrastructure while public funding supports research, skills and industrial ecosystems. The objective is not simply to generate near-term revenue but to ensure that strategically important capability exists within Europe as the technology develops.

Quantum computing is therefore emerging through an unusual mixture of commercial and strategic capital. Private companies are expected to develop sustainable businesses inside an ecosystem whose underlying development is increasingly supported by governments for reasons extending well beyond immediate financial return.

This also explains why NEC can reportedly step back from quantum hardware while IBM commits more than $10 billion and governments continue increasing their investment. These decisions are not necessarily contradictory because the organisations involved are working to different financial clocks.

For a diversified technology company, capital and engineering talent committed to quantum hardware cannot be invested elsewhere. A government may instead calculate that failing to develop domestic quantum capability creates an unacceptable strategic dependency. A specialist quantum company faces another calculation entirely, with its ability to reach the next technical milestone often dependent on raising enough capital to finance the journey.

The largest technology companies occupy a particularly strong position. IBM, Google, Microsoft and Amazon can sustain long development cycles because quantum sits inside much larger businesses with existing revenue, infrastructure and customer relationships. They can also derive value from research, intellectual property, cloud services and enterprise relationships before fault-tolerant quantum computing produces a conventional return.

This financial asymmetry may become increasingly important. The next phase of quantum computing could favour organisations capable of financing the longest development journey as much as those producing the most impressive hardware.

Technical progress is not commercial progress

The quantum industry has become considerably better at demonstrating technical progress. Qubit quality, gate fidelity, logical qubits, error correction, circuit depth and system performance provide increasingly sophisticated ways of measuring how the technology is developing. Commercial progress remains harder to quantify.

Cloud access demonstrates availability. Enterprise experiments demonstrate interest. Partnerships demonstrate ecosystem development. Proofs of concept help organisations understand where future applications may emerge. None of these automatically demonstrates that quantum computing is producing economic value greater than the cost of developing and operating it.

That does not diminish their importance. Emerging markets require experimentation, and companies need experience before commercially useful systems arrive. It does, however, mean that technical milestones should not automatically be treated as evidence of commercial validation. The two measure different forms of progress.

This distinction will become more important as the infrastructure surrounding quantum computing expands. Manufacturing capacity has to be developed, cryogenic and control systems have to scale, software ecosystems need to mature, and error correction consumes significant physical resources. Quantum processors will also need to operate as part of larger computing environments rather than as isolated machines.

The industry consequently faces two connected financing challenges. The first is finding sufficient capital to create useful quantum computers. The second is developing applications valuable enough that customers will ultimately pay for those systems and the services built around them.

The first challenge is currently being addressed through a combination of corporate investment, venture capital and substantial government support. The answer to the second remains much less certain.

From technology to economics

Questions about quantum ROI are sometimes interpreted as scepticism about the technology. They should instead be seen as evidence that quantum computing is beginning to encounter the same commercial disciplines as other emerging technologies.

Industries are not created by technical capability alone. They require manufacturing, supply chains, customers, skills, standards, infrastructure and economics capable of sustaining the ecosystem around them. Recent developments suggest quantum computing is increasingly confronting all of those requirements.

GlobalFoundries is preparing manufacturing capacity. IBM is committing billions to fault tolerance and scale. Governments are treating quantum capability as strategic infrastructure, while specialist companies continue to raise capital and pursue competing architectures. The investment is becoming more serious because the ambition is becoming more serious.

That makes the commercial question more important, not less. The quantum industry has spent much of the past decade demonstrating that increasingly capable quantum computers can be built. Its next challenge is to demonstrate that a sustainable market can be built around them, and that the economic value created by quantum computing can eventually justify the enormous investment required to get there.