In October 2023 the Biden Administration announced the designation of 31 Tech Hubs as part Phase 1 of a program that was previously authorized in the 2022 Chips and Science Act. The purpose of the Tech Hubs program is to invest an amount of approximately $500 million over a five year period in a few U.S. regions that are focused on creating critical technology ecosystems across a few key technology focus areas and create good jobs for American workers.

Quantum technology was deemed one of those key technologies and among the 31 designees, the Elevate Quantum Colorado group and The Bloch Tech Hub in the Chicago MSA (Metropolitan Statistical Area which including portions of Illinois, Indiana, and Wisconsin) were named to participate in Phase 1. (See our previous articles about the Phase 1 selections here and here.) Although other regions including the Washington/Virginia/Maryland region, the Seattle region, South Carolina, California, and others are also looking to build up a substantial quantum industry, they either chose not to apply for this program or were just not selected in Phase 1.

Phase 1 provided a minimum amount of funds for groups to plan and prepare a submission for Phase 2 which is now due on February 29, 2024. Phase 2 is where the really money will be spent with an estimated 5-10 Tech Hubs making it to Phase 2 with each of those Hubs receiving approximately $50-$75 million across approximately 3-8 projects. Given that many of the original 31 designees in Phase 1 will not make it to Phase 2, the question is which ones will make it? It is possible that both Colorado and Illinois will make it to Phase 2 but also possible that neither will make it. Our forecast is that the U.S. Economic Development Administration responsible for the program will select just one of these regions to receive the Phase 2 funding for quantum research.

Not willing to rely solely on potential funding from the federal government, the state governments of both Colorado and Illinois are also planning on providing some of their own funding programs. Governor Jared Polis of Colorado has recently submitted to his state legislature a Quantum Tax Credit bill with a budget of about $74 million. Of this amount, $44 million would be implemented in the form of  refundable state income tax credits for creating quantum research facilities, support research collaborations, and commercialization. Another $29 million would be reserved for establishing a University Quantum Incubator led by CU Boulder and other Colorado research universities. This funding would only be available if Colorado is awarded the Phase 2 Quantum Tech Hub funding.

Not to be outdone, Governor J.B. Pritzker of Illinois has proposed a funding of $500 million for quantum innovation in Illinois’ Fiscal Year 2025 state budget. Although a detailed breakout of this funding amount has yet to be released, we understand that $200 million would be allocated for a high-powered cryogenic facility, $100 million for the development of a quantum campus site, and $200 million for matching federal grants such as the Tech Hub grants mentioned above.

Both regions already have a substantial amount of quantum activity already. In Colorado, quantum development is already taking place at a major NIST facility in Boulder, the University of Colorado at Boulder, the JILA Research Institute, quantum computing companies Atom ComputingQuantinuum, and Infleqtion as well many other quantum component suppliers such as Maybell QuantumVescent Photonics. In Illinois, quantum research is currently being performed at the US Department of Energy’s Argonne National Laboratory and Fermi National Accelerator Laboratory, the Chicago Quantum Exchange consortium including the University of Chicago, University of Illinois Urbana-Champaign, University of Wisconsin-Madison, and Northwestern University. Also in the Chicago area are several quantum startup companies including EeroQqBraidmemQ,  InfleqtionQuantCAD, and Great Lakes Crystal Technologies as well as several potentially large end users.

Additional details of the proposed Colorado funding are available in a blog posted on the University of Colorado Boulder website here and also an article posted on the Longmont Leader’s website here. News articles about the Illinois proposed funding are posted on the Axios and Courthouse News Service websites here and here. The full Illinois FY 2025 budget proposal is also available online with details of the proposed quantum funding on page 73.

February 24, 2024