PsiQuantum secures $125M DARPA deal to build useful quantum computer by 2033

PsiQuantum's $125 million DARPA contract is the U.S. government's biggest bet yet that a commercially useful quantum computer can be built within a decade.

PsiQuantum's $125 million DARPA agreement funds testing of its photonics-based quantum hardware, advancing the government's push to determine whether an industrially useful quantum computer can be built by 2033.

"The DARPA vetting will help the industry work out what's real and what's not," Victor Peng, chief executive of PsiQuantum, said in an interview.

The award, the startup's largest U.S. government contract to date, follows a $31.8 million DARPA agreement in September 2025. PsiQuantum, founded in 2016, uses photonics — the light-based technology behind fiber-optic cables — with chips manufactured at GlobalFoundries in New York. The company raised $1 billion at a $7 billion valuation last September in a round led by BlackRock, Temasek and Baillie Gifford, with Nvidia's venture arm participating.

Peng said PsiQuantum's first commercial-scale machine should be running around 2030. "We can do simulations and solve problems that traditional computing, even for the next few centuries, won't solve," he said. The deal deepens PsiQuantum's ties with the U.S. government, which in May proposed taking minority equity stakes in nine quantum firms in exchange for $2 billion under the CHIPS Act, with PsiQuantum allocated $100 million.

The contract falls under DARPA's Quantum Benchmarking Initiative, which aims to determine whether it is possible to build an industrially useful quantum computer by 2033. The program evaluates competing approaches across the quantum sector, including superconducting circuits used by IBM and IonQ and trapped-ion systems from Quantinuum, as the government seeks to identify which technology can scale to commercial viability.

Peng, a former Advanced Micro Devices president, was named permanent chief executive this month after joining as interim chief in February. Intel Chief Executive Lip-Bu Tan joined PsiQuantum's board in April, and the company recently recruited executives from memory chipmaker Sandisk and chip design software firm Synopsys. The leadership additions signal PsiQuantum's push to scale from research into production.

The broader quantum computing sector has drawn increased government funding as concerns grow about the technology's potential to break current encryption standards. Rivals including IonQ, Rigetti Computing and D-Wave Systems have also secured government contracts, though none of PsiQuantum's scale. The DARPA award positions PsiQuantum as a leading contender in the race to deliver the first fault-tolerant quantum computer, a milestone that could unlock applications in drug discovery, materials science and cryptography.

PsiQuantum shares are not publicly traded, but the deal could boost sentiment for publicly listed quantum computing stocks including IonQ, Rigetti and D-Wave, which have rallied this year on government funding optimism. The company's $7 billion valuation from its September fundraising round reflects investor conviction that photonics-based quantum computing can overcome the error-correction challenges that have plagued competing approaches.

This article is for informational purposes only and does not constitute investment advice.