UK Quantum Startups at Risk as Labour Cuts $1.7 Billion Tech Funding

The United Kingdom recently withdrew a $1.7 billion commitment intended to support frontier technologies, including artificial intelligence and quantum computing. This move, following the Labour Party's victory in June, has sparked significant concern within the tech community, with industry insiders warning that the decision could stifle innovation and push UK-based startups to seek foreign investment.

Originally promised by Conservative leaders less than a year ago, the funding was aimed at accelerating the development of cutting-edge technologies. However, the Labour government’s reversal of this commitment in early August has led to widespread dismay among tech entrepreneurs and researchers.

Impact on the UK's Quantum Technology Sector

The UK is one of the four global hubs for quantum technology, alongside China, the European Union, and the United States. A significant number of the UK's quantum startups are spinouts from prestigious universities such as Oxford and Cambridge. As of June 2023, there were at least 51 quantum technology startups in the UK, many of which are recognized as leaders in the field.

With the cancellation of the $1.7 billion investment, concerns are mounting that these startups may relocate to countries offering better financial support and incentives. Industry experts fear that the UK could see an exodus of talent and innovation to the US and other countries where quantum technology investment remains robust.

Startups Begin to Look Abroad for Opportunities

Ashley Montanaro, co-founder of quantum computing startup Phasecraft, voiced his frustration with the UK government’s decision in a recent interview with Tech.EU. Montanaro highlighted the growing trend of UK quantum companies establishing international offices to tap into more supportive environments.

“I think you are seeing more and more companies like ours, who are setting up international offices and going where the level of support, excitement and enthusiasm about quantum is commensurate with their ambitions,” said Montanaro.

In response to the UK’s funding cuts, Phasecraft has opened a new office in Washington, D.C., to recruit talent and enhance its US-based networking operations.