PsiQuantum has signed a $125 million expanded agreement with the Defense Advanced Research Projects Agency to test and evaluate its utility-scale quantum computing architecture — the company’s largest U.S. government contract to date.
The performance-based award falls under DARPA’s Quantum Benchmarking Initiative, a program designed to rigorously verify whether commercial quantum computing approaches can achieve utility-scale operation — defined as computational value exceeding cost — by 2033. PsiQuantum is one of only two companies remaining in Stage C, QBI’s final phase, alongside Microsoft. Stage C gives DARPA’s audit teams direct access to a company’s facilities, designs and performance data to verify that a utility-scale quantum computer can be constructed and operated as designed.
The new $125 million tasking expands the scope and pace of verification work across hardware architecture, software and applications, and supporting infrastructure at PsiQuantum’s facilities in Milpitas, California, and Chicago. It follows a $31.8 million Stage C agreement announced in September 2025 and represents a significant acceleration of DARPA’s investment in the company’s approach.
“DARPA’s Quantum Benchmarking Initiative is one of the most comprehensive and rigorous government programs for evaluating emerging technology that I have ever seen,” said Victor Peng, PsiQuantum’s chief executive officer. “Their widely respected team of experts has stress-tested PsiQuantum’s approach, provided an independent and clear-eyed assessment and validation of our designs and our teams, and ultimately made our company and technology all the better for it.”
The Photonic Bet
PsiQuantum’s approach differs fundamentally from the superconducting qubit architectures pursued by IBM and Google, and from the trapped-ion systems used by IonQ and Quantinuum. The company encodes quantum information in single photons — particles of light — using a silicon photonics platform manufactured at GlobalFoundries’ Fab 8 in upstate New York, one of the world’s largest commercial semiconductor fabs.
The photonic approach carries a key engineering advantage: photons are unaffected by heat, allowing PsiQuantum’s systems to operate at temperatures more than 100 times higher than those required for superconducting qubits. This enables the use of high-density, rack-mounted cryogenic cabinets rather than the chandelier-style dilution refrigerators that constrain most competing architectures. The company’s cryogenic cabinets provide thousands of times the cooling power of the largest dilution refrigerators ever built, according to PsiQuantum.
The company’s Omega platform, published in Nature in early 2025, integrates superconducting single-photon detectors, single-photon sources and a high-performance optical switch into a single ultra-low-loss silicon nitride chip. PsiQuantum reports single-qubit fidelity of 99.99% and chip-to-chip fidelity of 99.72% using standard telecom fiber — a critical requirement for networking the thousands of chips needed in a utility-scale machine.
A key technical breakthrough underpinning the platform is the company’s development of Barium Titanate optical switches. BTO is among the world’s highest-performing electro-optic materials and had long been considered the “holy grail” of optical switching. PsiQuantum built the world’s largest molecular beam epitaxy tool to manufacture 300mm BTO wafers at its Santa Clara facility, which are then integrated with chips produced at GlobalFoundries.
Funding and Leadership
PsiQuantum was founded in 2016 by Prof. Jeremy O’Brien and Dr. Pete Shadbolt, both quantum physicists from the University of Bristol. The company has raised approximately $2.5 billion in total funding. Its September 2025 Series E raised $1 billion at a $7 billion valuation, led by BlackRock, Temasek and Baillie Gifford, with participation from NVIDIA’s venture arm, the Qatar Investment Authority, Ribbit Capital and Morgan Stanley’s Counterpoint Global. A subsequent round in May 2026 reportedly brought the valuation to $10.5 billion.
In February 2026, O’Brien moved to executive chairman and brought in Victor Peng as interim CEO. Peng was named permanent CEO in July 2026. He previously served as president of Advanced Micro Devices and as CEO of Xilinx, which AMD acquired for $49 billion in 2022. Intel CEO Lip-Bu Tan joined PsiQuantum’s board in April 2026.
Government Momentum
The DARPA contract is part of a broader U.S. government push to secure quantum advantage. In May 2026, the Department of Commerce announced letters of intent to provide $2 billion in CHIPS and Science Act incentives to nine quantum companies, with the government taking minority equity stakes in each. IBM received the largest allocation at $1 billion for a new quantum foundry; GlobalFoundries received $375 million. PsiQuantum’s letter of intent covers $100 million to accelerate domestic manufacturing of BTO optical switches, high-temperature single-photon detectors and advanced photonic packaging.
In June 2026, President Trump signed two executive orders — one on quantum innovation and one on post-quantum cryptography migration — followed by a White House quantum summit on July 7 that convened nearly 100 industry and government leaders. The administration set a goal of delivering a fault-tolerant, scientifically relevant quantum computer by 2028 and mandated federal agencies complete their transition to post-quantum cryptography by 2030.
PsiQuantum also maintains an active partnership with the Air Force Research Laboratory in Rome, New York, where the latest phase of collaboration integrates the company’s BTO electro-switch material into AFRL-designed optical circuits.
Defense and Security Stakes
The national security implications of fault-tolerant quantum computing are significant. A cryptographically relevant quantum computer capable of running Shor’s algorithm at scale could break the RSA and elliptic-curve encryption that secures most government and financial communications. DARPA’s QBI managing director, Micah Stoutimore, said earlier this year that “it now seems likely that someone will build a utility-scale quantum computer by 2033.” That timeline has compressed planning windows for both offensive and defensive quantum programs across the U.S. government.
Analysts note that PsiQuantum has not yet demonstrated a single logical qubit in a public setting. The $125 million award funds component tests, design audits and resource-estimate verification — not a working machine. Peng told Reuters the company’s first commercial-scale machine should be running around 2030.
DARPA’s Stage C field currently comprises two companies whose architectures could hardly differ more: PsiQuantum’s silicon photonics and fusion-based computation versus Microsoft’s topological qubit approach. Both differ fundamentally from the transmon and trapped-ion machines that dominate today’s cloud quantum offerings. DARPA has stated QBI is not a winner-take-all competition and continues to evaluate all viable approaches, including a Stage B cohort of 11 companies that includes Quantinuum and Silicon Quantum Computing.
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