Quantum computing doesn’t need to exist to make venture capital deals

The AI bubble is losing steam. Venture capital is desperate for a new lottery ticket. What’s the next bubble after AI falls over? Will it be modular nuclear? Will it be humanoid robots? The hot favourite is quantum computing! Quantum will break all the codes! The obsolete ones. It’ll, uh, do...

The AI bubble is losing steam. Venture capital is desperate for a new lottery ticket. What’s the next bubble after AI falls over? Will it be modular nuclear? Will it be humanoid robots? The hot favourite is quantum computing! Quantum will break all the codes! The obsolete ones. It’ll, uh, do other things. It’ll be awesome! Quantum computing is a real field — of mostly theoretical physics. You’ll see press releases hyping up the slightest scientific result as revolutionary, because they’re trying to get the hype going. Pitchbook is the news site for venture capital. You should all be reading Pitchbook. Dimitri Zabelin from Pitchbook writes on quantum computing funding: “Bit by Qubit: Global Quantum Computing Funding Hits New Records and Is Accelerating.” [Pitchbook, PDF, archive] Quantum computing doesn’t exist as a tech. It’s not in any way a product. It’s still just physics experiments. But that doesn’t stop the flow of cash for a moment: [Pitchbook] Quantum computing has crossed into institutional-scale territory. A single quarter, Q4 2025’s record $1.5 billion, now exceeds the entire annual VC total raised in every year before 2021. The total investment in quantum computing for all of 2025 was $3.9 billion. What’s pulling people into this sector that doesn’t have a product? The leading investors by capital deployed are now NVIDIA, BlackRock, Baillie Gifford, JPMorgan, and sovereign wealth funds rather than specialist quantum venture firms. This is because they have nothing else to invest in. The arrival of this investor class validates quantum as an institutional allocation and accelerates the capital available to category-defining platforms. Really? Because this sounds like flop-sweat desperation. Money is going into quantum because money is going into quantum: What began as a niche, early-stage asset class attracting modest research-adjacent capital has matured into a sector capable of absorbing institutional-scale, late-stage commitments at valuations that would have been unthinkable earlier in its history. That is: they’re piling in because they’re piling in. Is quantum the hot new field if you want to get some venture bucks? Well, not really: In 2025, the average pre-money valuation hit $537.4 million while the median was just $32.8 million. Once again, this unusually wide gap shows that a few extremely high valuations pulled the average up, even though most companies were valued far lower. This report talks about the field of quantum getting cashed up — but most of the deals are just a few companies getting late stage funding rounds. There’s also a lot of companies that try to imply they’re doing the revolutionary version of quantum computing that breaks all the codes. But they’re really doing another thing entirely that they can say is technically some form of computation that involves quantum physics. Looking at you, D-Wave. Everything in this Pitchbook report looks reasonably accurate. It’s genuine coverage — if what you want is a racetrack form guide for gamblers trying to pick which horse to bet on. I wish the quantum startups every success. Even if it’s at least five to ten years off. Some of them think it might be closer! But if you’re not a physicist or a venture capital gambler, I’d worry about this stuff when there’s a box you can buy. One that does things. Things that are more useful to the world than, say, breaking all of bitcoin. [Reuters] Video — Podcast

Source: Pivot to AI — Published July 8, 2026 at 22:08 UTC — Category: Business