The Year of Quantum: From Concept to Reality in 2025
McKinsey’s Fourth Annual Quantum Technology Monitor Report Highlights Rapid Growth and Innovation
June 23, 2025 — Quantum technology (QT) is accelerating at an unprecedented pace, marking 2025 as the International Year of Quantum Science and Technology, designated by the United Nations to celebrate 100 years since the foundational development of quantum mechanics. According to McKinsey’s latest Quantum Technology Monitor—its fourth annual report—quantum technology is transitioning from theoretical promise to tangible reality with surging investments and breakthrough innovations driving the market toward a projected $100 billion valuation within the next decade.
Quantum Technology: The Three Pillars
Quantum technology encompasses three main domains, each advancing rapidly:
- Quantum Computing: This novel computing paradigm exploits quantum mechanics to perform complex calculations significantly faster than classical computers, unlocking new possibilities across various sectors.
- Quantum Communication: Focused on the secure transmission of quantum information over large distances, quantum communication offers unparalleled data security, defending against threats including future quantum-enabled attacks.
- Quantum Sensing: Utilizing quantum systems to create next-generation sensors, this field promises measurements far more sensitive than classical devices, with applications ranging from navigation to medical diagnostics.
McKinsey’s research estimates that by 2035, these combined sectors could generate up to $97 billion in revenue worldwide. Quantum computing is expected to dominate this growth, expanding from $4 billion in revenue in 2024 to potentially $72 billion by 2035. The chemicals, life sciences, finance, and mobility industries are anticipated to be the most impacted by this quantum revolution.
Market Growth and Investment Trends
2024 marked a pivotal year as the quantum industry shifted focus from merely increasing the number of quantum bits (qubits) to stabilizing and protecting qubit performance. This transition signals a readiness for mission-critical industries to begin integrating quantum technology into their infrastructure safely.
Investment in QT start-ups presented robust growth: global funding reached nearly $2 billion in 2024, a 50% leap from $1.3 billion in 2023. Notably, while private sector funding accounted for about two-thirds of this total, representing $1.3 billion, its share declined by 19 percentage points compared to the prior year. Conversely, public sector investments grew significantly, now comprising 34% of overall funding or $680 million. This shift underscores intensified government commitment worldwide to advance quantum technologies.
Large-scale investors in 2024 included partnerships such as SoftBank with Quantinuum, Aramco’s stake in Pasqal, Japan’s National Institute of Advanced Industrial Science and Technology (AIST) collaborating with QuEra and IonQ, and Qatar Investment Authority’s alliance with Alice & Bob. Mature startups PsiQuantum and Quantinuum dominated funding rounds, attracting half of total venture investments, reflecting growing confidence in more established players. These companies collectively generated between $650 million and $750 million in revenue during 2024, with expected revenues surpassing $1 billion in 2025, fueled by expanding quantum hardware deployments in industry and defense sectors.
Innovation Hubs and Emerging Clusters
The QT ecosystem is witnessing the emergence of innovation clusters where startups, accelerators, research institutions, and investors converge. These hubs foster collaboration and support for quantum hardware production and computing resources through initiatives including greenfield facilities. Noteworthy regional centers include Abu Dhabi, Tel Aviv, Tokyo, as well as US locales like Illinois and Maryland.
Asia is gaining prominence as a leader in QT innovation with five of nineteen new QT startups founded in the region in 2024. Singapore alone invested approximately $222 million in quantum research and talent development. Internationally, governments escalated support; Australia unveiled a $620 million package enabling PsiQuantum to build the world’s first utility-scale, fault-tolerant quantum computer in Brisbane, while Illinois committed $500 million toward a quantum park development. Early 2025 saw Japan pledge $7.4 billion to boost the sector and Spain commit $900 million, pushing total public financing announcements beyond $10 billion.
Breakthrough Innovations and Technology Advances
For the first time since McKinsey began tracking QT, focus is shifting decisively from research and development toward deployment. Innovations in 2024 emphasized safety, security, and error correction, essential for practical and reliable quantum applications.
Major corporations—Amazon, Google, IBM, Microsoft—led key technological advances. Google’s Willow quantum chip, containing 105 physical qubits, demonstrated significant strides in error correction and operational stability, accomplishing certain complex calculations exponentially faster than classical supercomputers while maintaining low error rates.
Startups also made headway in quantum control solutions, the critical hardware and software enabling quantum systems to perform tasks like qubit initialization, gate operations, and error correction. For example, Australian startup Q-CTRL collaborated with Nvidia and Oxford Quantum Circuits (OQC) to address computational bottlenecks related to quantum error suppression.
Other notable innovators in quantum control include IBM, Keysight Technologies, Kipu Quantum, Quantum Machines, Qedma, and Zurich Instruments. The collective progress in error correction technologies positions quantum computing to become a more practical and scalable technology.
Outlook: Toward a Quantum Future
McKinsey’s comprehensive analysis reveals that if current trajectories continue, the global quantum technology market could nearly double its size from 2035 to 2040, reaching an estimated $198 billion. This rapid expansion reflects continued technological improvements, wider adoption, and maturation of QT start-ups and industrial players.
As governments and private sectors boost funding and accelerate innovation, quantum technologies stand at the cusp of transforming industries, ushering in opportunities in secure communication, advanced computation, and ultra-sensitive sensing that were once purely theoretical.
About the Report
McKinsey’s Quantum Technology Monitor synthesizes data from public sources, expert insights, proprietary analytics, investor reports, and press releases to provide a detailed, validated view of the evolving QT landscape. While focused on three key areas—quantum computing, communication, and sensing—the report recognizes the inherent uncertainties in technological progress and market adoption by presenting revenue projections as ranges.
For the full McKinsey Quantum Technology Monitor 2025 report and further insights, visit McKinsey’s official website.
