Deep dive: Quantum mechanics & particle physics — the fastest-moving subsegments to watch

Global investment in quantum technology reached $42 billion in cumulative private funding by the end of 2025, according to McKinsey's Quantum Technology Monitor, with annual venture capital deployment surging 38% year-over-year to $3.2 billion. Meanwhile, CERN's High-Luminosity Large Hadron Collider upgrade, budgeted at CHF 1.4 billion, is on track for full operation by 2029, promising a tenfold increase in collision data that will reshape the landscape of particle physics discovery. For investors navigating this space, the challenge is not whether quantum mechanics and particle physics will produce transformative applications but which subsegments are moving fastest and where capital can generate the highest returns within the next five to ten years.

Why It Matters

Quantum mechanics and particle physics are no longer confined to university laboratories and government research programs. The transition from fundamental research to commercial application has accelerated dramatically since 2022, driven by three converging forces: advances in quantum hardware that make previously theoretical capabilities practically achievable, growing demand from industries including pharmaceuticals, finance, logistics, and materials science for computational power beyond classical limits, and government programs in China, the EU, India, and the US that have committed over $35 billion in public funding to quantum research and industrialization (Quantum Technology Monitor, McKinsey, 2025).

For emerging markets specifically, the opportunity is significant. Countries including Brazil, India, South Korea, and Singapore are establishing national quantum missions with combined budgets exceeding $5 billion. India's National Quantum Mission, launched in 2023 with an INR 6,003 crore (approximately $720 million) allocation, targets development of quantum computing, communications, sensing, and materials by 2031. These programs create investment opportunities not only in direct quantum technology companies but in the broader ecosystem of enabling technologies, workforce development, and infrastructure.

Particle physics, while operating on longer timescales, is generating near-term commercial spillovers at an unprecedented rate. Technologies originally developed for particle detectors at CERN, Fermilab, and KEK are being commercialized for medical imaging, radiation therapy, industrial inspection, and environmental monitoring. The CERN Knowledge Transfer group reported 86 active license agreements and 32 spin-off companies as of 2025, generating combined annual revenues exceeding EUR 200 million (CERN Annual Report, 2025).

Key Concepts

Quantum computing uses qubits that exploit superposition and entanglement to perform certain calculations exponentially faster than classical computers. The field is subdivided by hardware approach: superconducting circuits (IBM, Google), trapped ions (IonQ, Quantinuum), photonic systems (PsiQuantum, Xanadu), neutral atoms (Atom Computing, Pasqal), and topological qubits (Microsoft). Each approach has distinct advantages in qubit coherence time, gate fidelity, scalability, and operating temperature requirements.

Quantum sensing exploits the extreme sensitivity of quantum states to external perturbations (magnetic fields, gravity, acceleration, time) to build sensors with precision orders of magnitude beyond classical instruments. Applications span navigation (GPS-denied environments), medical diagnostics (magnetoencephalography), mineral exploration, and infrastructure monitoring.

Quantum networking and communications use quantum key distribution (QKD) and entanglement distribution to create communication channels with information-theoretic security guarantees. China's 2,000-kilometer Beijing-Shanghai quantum communication backbone and the EU's EuroQCI initiative represent the largest deployed infrastructure.

Particle physics detector technology encompasses silicon pixel detectors, time projection chambers, calorimeters, and scintillation detectors originally developed for high-energy physics experiments that are being adapted for commercial applications in medical imaging (PET and SPECT), cargo screening, and environmental radiation monitoring.

Quantum materials are substances whose electronic, magnetic, or optical properties are governed by quantum mechanical effects at macroscopic scales, including topological insulators, quantum spin liquids, and unconventional superconductors. These materials are critical enablers for next-generation quantum hardware and conventional electronics.

What's Working

Quantum Computing: Error Correction Milestones

The single most significant development in quantum computing during 2024 and 2025 was the demonstration of below-threshold quantum error correction. Google's Willow processor, announced in December 2024, demonstrated that increasing the number of qubits in a surface code actually reduced error rates, achieving a logical error rate of 10^-7 with a distance-7 code. This crossed the critical threshold where adding more qubits improves rather than degrades computational reliability, marking the transition from noisy intermediate-scale quantum (NISQ) devices to the path toward fault-tolerant quantum computing.

IBM's Heron processor, deployed across its 156-qubit systems in 2025, achieved two-qubit gate fidelities of 99.5% and demonstrated error-mitigated circuits exceeding 5,000 gates, enabling useful quantum chemistry simulations for lithium-ion battery electrolyte optimization. The company's roadmap targets a 100,000-qubit system by 2033, with intermediate milestones including the Starling processor (200+ qubits with improved connectivity) in 2027.

Quantinuum's H2 trapped-ion processor achieved 99.9% two-qubit gate fidelity in 2025, the highest of any commercial system, and demonstrated real-time quantum error correction with logical qubit lifetimes exceeding physical qubit lifetimes by a factor of three. The company has secured over $600 million in funding from investors including JPMorgan Chase, which uses Quantinuum hardware for quantum Monte Carlo simulations in derivatives pricing.

Quantum Sensing: Commercial Deployments Accelerating

Quantum sensing has emerged as the subsegment with the shortest path to commercial revenue. Unlike quantum computing, which requires fault tolerance for most high-value applications, quantum sensors deliver immediate performance advantages over classical alternatives. The global quantum sensing market reached $680 million in 2025 and is projected to exceed $2.4 billion by 2030 (Yole Group, 2025).

SandboxAQ, spun out of Alphabet in 2022, has deployed its AQ magnetic sensing platform with the US Department of Defense and several oil and gas companies for subsurface mapping and navigation in GPS-denied environments. The company raised $500 million in its Series B round in 2024, valuing it at approximately $5.6 billion, making it the most valuable pure-play quantum technology company globally.

In medical applications, Cerca Magnetics (a University of Nottingham spin-out) has commercialized optically pumped magnetometer (OPM) based magnetoencephalography systems that achieve sub-millimeter spatial resolution for brain imaging without requiring the cryogenic cooling of conventional SQUID-based systems. The wearable OPM-MEG system, costing approximately $1.5 million versus $3 to $5 million for a conventional MEG scanner, is now deployed at 14 clinical sites across the UK, US, and South Korea (Cerca Magnetics, 2025).

Particle Physics Technology Transfer: Medical and Industrial Applications

Detector technologies from CERN's CMS and ATLAS experiments are driving a new generation of medical imaging systems. The CERN Medipix collaboration's Medipix3 photon-counting detector chip has been licensed to Mars Bioimaging (New Zealand), which has developed the world's first spectral (color) X-ray scanner for human imaging. The MARS scanner produces three-dimensional color images that distinguish between bone, soft tissue, fat, and contrast agents in a single scan, with potential to eliminate the need for multiple imaging modalities in diagnostic workflows. Clinical trials across eight hospitals in New Zealand and Australia demonstrated diagnostic accuracy improvements of 15 to 25% for musculoskeletal and vascular conditions compared to conventional CT (Mars Bioimaging, 2025).

Proton therapy for cancer treatment, which originated directly from particle accelerator technology, has expanded to 120 operational centers worldwide with 47 additional facilities under construction. The market for proton therapy systems reached $3.8 billion in 2025, driven by compact accelerator designs from IBA (Belgium) and Varian (Siemens Healthineers) that reduce facility footprint by 40 to 60% compared to earlier cyclotron-based systems (IBA, 2025).

What's Not Working

Quantum Computing: The Revenue Gap

Despite billions in investment, quantum computing companies have generated minimal commercial revenue relative to their valuations. IonQ reported $43 million in revenue for fiscal year 2025 against a market capitalization exceeding $8 billion. Rigetti Computing, with $15 million in annual revenue, has consumed over $350 million in cumulative funding. The gap between demonstrated quantum advantage on carefully constructed benchmark problems and the ability to solve commercially relevant problems at scale remains substantial.

The timeline to fault-tolerant quantum computing has consistently slipped. Estimates from Boston Consulting Group suggest that commercially relevant quantum advantage for optimization and simulation problems requires 10,000 to 100,000 logical qubits, which translates to millions of physical qubits at current error rates. Most hardware roadmaps do not reach this threshold before 2033 to 2035, creating a "quantum winter" risk where investor patience exhausts before commercial returns materialize.

Quantum Communications: Standards and Interoperability Challenges

QKD networks face fundamental challenges in standardization and interoperability. China's quantum communication backbone operates on proprietary protocols that are incompatible with European EuroQCI standards. The lack of agreed-upon interfaces between different vendors' QKD equipment, quantum random number generators, and classical network management systems means that each deployment is effectively a custom integration project, with implementation costs of $10 to $50 million per metropolitan network segment.

The US National Security Agency's 2024 position paper also questioned the practical security advantages of QKD over post-quantum cryptographic (PQC) algorithms, noting that QKD's requirement for dedicated fiber infrastructure limits its applicability compared to software-based PQC solutions that can be deployed on existing networks (NSA, 2024). This has dampened enterprise and government procurement interest in the US market specifically.

Particle Physics: Funding Concentration and Emerging Market Access

Major particle physics experiments remain concentrated in the US (Fermilab), Europe (CERN), and Japan (KEK), with emerging markets largely excluded from the decision-making and priority-setting processes that determine research directions. India's participation in CERN experiments, while growing through the India-CERN collaboration agreements, involves approximately 200 researchers compared to the thousands contributed by European member states. Brazil's CBPF (Centro Brasileiro de Pesquisas Fisicas) and South Africa's iThemba LABS contribute to specific detector subsystems but lack the funding to lead experiment design or host major facilities.

Key Players

Established Companies

IBM Quantum: operates the largest fleet of commercially accessible quantum processors, with 127 to 1,121 qubit systems available through its IBM Quantum Network spanning 250+ organizations.

Google Quantum AI: demonstrated below-threshold error correction with the Willow processor and continues to lead in superconducting qubit performance metrics.

Siemens Healthineers (Varian): dominates the proton therapy market through its compact proton therapy systems installed at over 60 cancer centers globally.

IBA (Ion Beam Applications): Belgian company that pioneered commercial proton therapy and holds approximately 45% global market share in proton therapy systems.

Startups

PsiQuantum: photonic quantum computing company that raised $665 million and is building a silicon photonic fault-tolerant quantum computer in partnership with GlobalFoundries.

SandboxAQ: Alphabet spin-out focused on quantum sensing and AI, valued at $5.6 billion, with deployments across defense, navigation, and healthcare.

Pasqal: French neutral-atom quantum computing startup that raised EUR 100 million in 2023, with deployments in energy optimization and financial modeling.

Mars Bioimaging: New Zealand startup commercializing CERN Medipix detector technology for spectral X-ray medical imaging.

Investors

Breakthrough Energy Ventures: Bill Gates-backed fund with investments across quantum computing and quantum-enabled climate technology.

In-Q-Tel: US intelligence community venture fund with active investments in quantum sensing, quantum communications, and post-quantum cryptography.

Samsung Venture Investment: has invested in multiple quantum computing startups including IonQ and is building quantum research capacity in South Korea.

Action Checklist

• Evaluate quantum sensing companies for near-term revenue potential, focusing on defense, medical, and resource exploration applications with proven deployment track records
• Monitor quantum computing error correction benchmarks (logical error rates, gate fidelities, qubit counts) as leading indicators of timeline to fault-tolerant systems
• Assess particle physics technology transfer pipelines at CERN, Fermilab, and KEK for commercial spin-out opportunities in medical imaging and industrial inspection
• Track emerging market quantum missions (India, Brazil, South Korea, Singapore) for co-investment opportunities alongside government funding programs
• Diversify quantum portfolio across computing, sensing, and communications to hedge against subsegment-specific timing risk
• Evaluate post-quantum cryptography companies as a hedge against delayed QKD commercialization

FAQ

Q: Which quantum subsegment offers the best risk-adjusted returns for investors in the next three to five years? A: Quantum sensing offers the strongest near-term investment case because it delivers measurable performance advantages over classical sensors today, without requiring the fault-tolerant hardware breakthroughs that quantum computing still needs. Companies like SandboxAQ and Cerca Magnetics are already generating commercial revenue from defense, medical, and industrial customers. The quantum sensing market is projected to grow at 28% CAGR through 2030, with lower capital intensity than quantum computing hardware development.

Q: How should investors evaluate emerging market opportunities in quantum technology? A: Focus on three criteria: the size and structure of national quantum funding programs (India's $720 million mission creates a substantial domestic market), the strength of the local research talent pipeline (India graduates approximately 25,000 physics PhDs annually, Brazil 8,000), and the presence of enabling infrastructure such as semiconductor fabrication, cryogenics supply chains, and fiber optic networks. Countries with all three elements can support domestic quantum companies rather than functioning solely as customers for US and European vendors.

Q: What is the realistic timeline for quantum computers to impact drug discovery and materials science? A: Current quantum hardware can simulate small molecules (up to approximately 50 to 100 atoms) with accuracy comparable to classical methods but without a speed advantage. Commercially relevant quantum advantage for drug discovery, specifically simulating protein-ligand interactions and reaction pathways for molecules with 200+ atoms, requires fault-tolerant processors with 10,000+ logical qubits. Based on current hardware roadmaps from IBM, Google, and Microsoft, this capability is expected between 2032 and 2036. Near-term value comes from hybrid quantum-classical algorithms that use today's hardware to accelerate specific subroutines within larger classical workflows.

Q: Are particle physics spin-offs a viable investment category? A: Yes, with caveats. CERN's technology transfer pipeline has produced genuinely differentiated products, particularly in medical imaging (Medipix detectors) and proton therapy. The key evaluation criterion is whether the spin-off technology provides a defensible advantage: detector technologies with CERN-originated IP are difficult for competitors to replicate because they reflect decades of specialized engineering. However, revenue ramp times are typically long (5 to 10 years from spin-out to meaningful revenue) because medical device certification and clinical validation processes are time-intensive. Investors should expect venture-style timelines with deep-tech risk profiles.

Sources

• McKinsey & Company. (2025). Quantum Technology Monitor: Global Investment and Technology Readiness Update. New York: McKinsey & Company.
• CERN. (2025). Annual Report 2024: Knowledge Transfer and Technology Highlights. Geneva: European Organization for Nuclear Research.
• Yole Group. (2025). Quantum Sensing Market Report: Technologies, Applications, and Forecasts 2025-2030. Lyon: Yole Group.
• Mars Bioimaging. (2025). MARS Spectral CT Clinical Trial Results: Musculoskeletal and Vascular Imaging Performance. Christchurch, NZ: Mars Bioimaging Ltd.
• IBA (Ion Beam Applications). (2025). Proton Therapy Market Report and Technology Roadmap. Louvain-la-Neuve, Belgium: IBA Group.
• National Security Agency. (2024). Commercial National Security Algorithm Suite 2.0: Guidance on Post-Quantum Cryptography Migration. Fort Meade, MD: NSA Cybersecurity Directorate.
• Boston Consulting Group. (2025). The Long-Term Forecast for Quantum Computing: Hardware Roadmaps and Commercial Timeline Assessment. Boston: BCG.
• Cerca Magnetics. (2025). Optically Pumped Magnetometer MEG: Clinical Deployment and Performance Benchmarks. Nottingham, UK: Cerca Magnetics Ltd.