Last month, QuEra Computing, a quantum computing startup, secured an impressive $230 million funding round, attracting investments from notable players like SoftBank’s Vision Fund and Google Quantum AI. Just a few weeks later, Quantum Machines, based in Israel, raised $170 million in a Series C funding round led by PSG Equity.

If last year is any indication, this is just the beginning of significant funding for quantum startups in 2024.

Indeed, 2024 has already set a record for venture capital investment in quantum technology—a computing paradigm that outpaces traditional systems by executing numerous complex calculations at once.

In the previous year, quantum startups backed by venture capital amassed $1.9 billion across 62 funding rounds, marking a remarkable 138% increase from the $789 million raised in 67 rounds in 2023.

A major contributor to this surge was a substantial $594 million funding package secured by PsiQuantum, located in Palo Alto, California, from the Australian Commonwealth and Queensland Government. This funding, which includes equity, grants, and loans, will support the construction of a quantum computer near Brisbane Airport in Australia.

Even without this significant round, last year’s total would have come close to the previous record of $1.5 billion set in 2022.

Reasons for optimism abound. The influx of funding for quantum startups has likely been fueled by major advancements from companies like Google and IBM over the past year. These breakthroughs show no signs of slowing down; just last month, Microsoft announced it had developed a new state of matter in its pursuit of a highly powerful machine, introducing what it calls a “topological qubit” based on a novel physical composition.

Venture capitalists, always on the lookout for the next groundbreaking quantum startup, are surely keeping a close eye on the developments from these tech giants. In addition to PsiQuantum’s funding, several other startups have also raised substantial amounts recently.

In January, Quantinuum, a company based in Broomfield, Colorado, which emerged from Honeywell in 2021 and later merged with Cambridge Quantum Computing, successfully secured a $300 million equity funding round, achieving a pre-money valuation of $5 billion.

In late December, SandboxAQ, an AI and quantum computing startup spun off from Alphabet, also completed a $300 million funding round, reaching a valuation of $5.6 billion.

Additionally, Quantum Machines, known for its hardware and software solutions for quantum computer control and operation, raised $100 million in a venture round last January.

Moreover, Riverlane, a U.K. firm specializing in quantum error correction technology, secured $75 million in Series C funding in August.

Continuing the trend, there’s little reason to expect this year to deviate from last year’s investment trajectory in the quantum sector.

A significant factor driving this momentum is generative AI. Quantum computing has the potential to address the substantial computing demands and energy challenges that currently hinder AI advancements.

Just as data centers have attracted billions in investments to tackle these issues, quantum computing could see similar financial support.

Quantum computers promise to outperform any supercomputer, and while they require substantial energy to maintain the necessary absolute zero temperatures for operation, they could still be up to 100 times more energy-efficient than traditional supercomputers for similar calculations.

Beyond AI, there’s a growing recognition of quantum technology’s transformative potential across various sectors, including healthcare, biotechnology, financial services, and even defense.