Winning that race is a top priority for No. 10 Downing Street, which has identified quantum as one of six frontier technologies crucial to “U.K. security and sovereignty." In a sign of its importance, Britain’s quantum prowess formed a central plank of the country’s technology partnership with the U.S. U.K. officials pointed to the industry as proof that the deal was not one-sided.

Now, the government is preparing to significantly increase support for a small number of the most promising quantum startups, after Technology Secretary Liz Kendall said the U.K. must do “fewer things better.”

According to six people familiar with discussions, the government plans to dedicate the bulk of a £670 million commitment for quantum computing to just a handful of startups, with payments tied to reaching certain technical milestones.

Prime Minister Keir Starmer is expected to announce the plan early in the new year, two of the people said, though both cautioned that plans remain subject to change.

“We are determined to unlock quantum’s benefits for society and the economy,” a spokesperson for the Department for Science, Innovation and Technology said, noting that the U.K. had backed “one of the largest commitments made to this technology of any government in the world.” 

Bigger bets

The U.K.’s early recognition of quantum’s potential has seen it capture 18 percent of global funding in the sector since 2020, according to a study by the Royal Academy of Engineering. 

But there are fears that its lead could slip, with the U.S., China, Canada, Denmark, France and Germany all investing heavily, and some U.K. startups saying they are forced to look abroad to raise enough capital.

A $1.1 billion takeover of leading British startup Oxford Ionics by U.S. rival IonQ this summer has only sharpened concerns, although the company plans to retain the U.K. as its R&D hub. 

Jakob Mökander, director of science and technology policy at the Tony Blair Institute and co-author of a report warning that the U.K. risked squandering its lead in quantum, said: “Now is the time to make bets on promising startups that can grow into national champions.” 

That’s been the key message in discussions between the sector and government officials on next steps, according to the people above. 

“It is crunch time for quantum computing in the U.K. right now,” said Sebastian Weidt, founder of Universal Quantum. 

Despite being based in the south of England, Weidt said the company has received more support from overseas, including a €67 million contract in Germany. France has also awarded €500 million to just five startups. 

In contrast, Weidt said the U.K. has failed to move beyond small grants, arguing it needs to become a better customer of its “sovereign” companies or risk ceding “the great quantum computing foundations the U.K. has built over decades ... to foreign players.” 

“We need to see now more ambition, and we need to see more pace,” Gerald Mullally, CEO of Oxford Quantum Circuits, said, stressing that the U.K. must “act at a level of scale that is competitive relative to what we’re seeing in other nations.”

Less is more

Quantum computing is precisely the type of “critical sector where the U.K. has a global competitive edge” that the government should be getting behind, Ed Bussey, CEO of Oxford Science Enterprises, which backs university spin-outs, said.

The industry now expects the government to put money where its mouth is, the people cited above said, with one suggesting a handful of companies could get up to £50 million each under the initiative.

Procurement and government investment could also be forthcoming. 

In recent weeks, the government committed to “leverage its procurement budgets to drive innovation,” including to “act as an early buyer for the best new technologies to de-risk investment, create demand, and pave the way to market.”

As part of a “strategic reset,” the U.K.’s research and development funding agency UKRI will also become more “choiceful” in allocating £7 billion for scale-ups over the next four years to companies in areas where the U.K. has genuine international advantage, its CEO Ian Chapman has said.

In a new five-year strategy, the British Business Bank also vowed to increase investment and take on greater risk “to support the most strategically important scale-up companies to stay in the U.K.”