The U.S. Department of War announced about $350 million in quantum computing initiatives on October 8, 2026. The department paired about $200 million in new funding for the Quantum Benchmarking Initiative (QBI), run by the Defense Advanced Research Projects Agency (DARPA), with a conditional commitment from the department’s Office of Strategic Capital to lend PsiQuantum about $150 million. The department said the initiatives are meant to prepare it for national-security applications of quantum computing, to verify and validate prospective utility-scale machines, and to strengthen the U.S. quantum industrial base.
With the DARPA money, government evaluators will test whether four companies’ proposed utility-scale quantum computers can be built and operated as intended. PsiQuantum said the loan “remains strictly conditional and is not guaranteed.”
The DARPA funding
The department tied the new DARPA funding to the agency’s October 7 selection of Atom Computing, Diraq, IBM, and IonQ for Stage C, the final phase of QBI. Microsoft and PsiQuantum were already in that phase through an earlier DARPA program. The department said DARPA had previously invested more than $650 million in prospective quantum computing providers.
DARPA designed QBI to verify whether any approach to quantum computing can reach utility-scale operation by 2033. By utility-scale operation, DARPA means that a machine’s computational value exceeds its cost.
The PsiQuantum loan
PsiQuantum said it would use the loan, which it put at up to $150 million, at its 140,000-square-foot manufacturing and prototyping hub in Milpitas, California. The company said it plans to buy test equipment for components and assemblies, along with infrastructure for assembling and integrating systems. It also plans to buy cryogenic systems for prototypes and to add its own co-investment.
PsiQuantum said it must meet financial, legal, technical, and regulatory conditions before it can receive a final loan commitment.
In July, the company signed a $125 million expanded agreement with DARPA. In September, the Commerce Department finalized an award of up to $100 million to PsiQuantum under the CHIPS and Science Act.
Application workshops
DARPA will host quantum computing application workshops beginning before January 2027, the department said. DARPA will coordinate them with the Energy Department’s Office of Science and two other organizations, the National Nuclear Security Administration and the Laboratory for Physical Sciences.
The department said DARPA will use the workshops to bring end users together with quantum-algorithm experts. It said applications in chemistry, materials science, and physics “will enable the development of next-generation weapons, platforms, and other critical capabilities.”
Also on October 8, the Department of Energy (DOE) released eight Quantum Genesis Priority Applications, science problems in chemistry, materials, subatomic physics, and applied mathematics. DOE will use them to judge its first fault-tolerant quantum computers, machines designed to correct their own errors during long calculations. Through a separate Q Competition announced in September, DOE plans to offer companies up to $215 million to build such machines, most of it subject to congressional appropriations.
