Novo Holdings Report: Quantum Investment Must Move Beyond Hardware to Build Applications

Analysts argue that quantum investment must expand beyond hardware to applications that turn computing advances into valuable business decisions. The report identifies domain-specific algorithms and vertical platforms as potentially defensible positions that remain comparatively underfunded. Life sciences stand out because companies already pay to improve high-value molecular decisions, although early quantum applications will likely address narrow problems within larger classical workflows. Quantum investors must begin backing applications that turn emerging machines into useful business tools, according to a new report from Novo Holdings. The report identifies life sciences as one of the clearest opportunities for building commercially defensible quantum applications. The report points to the industry’s next stage that will require investment in domain-specific algorithms, customer workflows and application platforms alongside continued spending on quantum hardware — such as processors and components. Companies that can establish these positions before fault-tolerant quantum computers become widely available could capture a large share of the technology’s lasting economic value. Novo Holdings’ Seed Investments Quantum Team said roughly 70% of the approximately $13.9 billion invested in private quantum-computing companies between 2014 and 2025 went to hardware and components. This estimate, however, doesn’t include public-market transactions and government programs, which would make that total much…