Three Canadian quantum computing startups have advanced to the second stage of the Quantum Benchmarking Initiative (QBI), a U.S. military-backed research program that aims to build a usable quantum computer by 2033.

Toronto-headquartered Xanadu Quantum Technologies Inc. , Montreal-based Nord Quantique Inc. and Vancouver’s Photonic Inc., announced on Thursday that they will be participating in QBI’s Stage B, which will last for around one year. In this round, each company will map out their research and development blueprints for building a useful

quantum computer and are eligible to receive up to US$15 million in funding. Eleven out of eighteen companies have progressed into the program’s second stage so far, including International Business Machines Corp. and IonQ Inc. in the United States, the United Kingdom’s Quantum Motion Technologies Ltd. and Australia’s Diraq Pty Ltd. and Silicon Quantum Computing Pty Ltd.

Launched by the U.S.’s Defense Advanced Research Projects Agency (DARPA), which has funded major technological breakthroughs from GPS to drones, the QBI will award up to US$300 million to the companies that make it to the third and final stage, where they must prove that the quantum computer they designed can be built and will work as intended.

The QBI is not a competition to determine the winners and losers in quantum computing, according to DARPA. “The aim is to evaluate each company’s approach. DARPA is interested in pursuing all viable approaches for which there is available funding,” the agency said.

Quantum computing startups in Canada and around the world are now vying for funding in a capital-intensive industry that has experienced a recent surge in investor interest.

QBI’s US$300 million in funding is a “big draw card” for quantum startups, Xanadu chief executive Christian Weedbrook

said in October. Success in the QBI program also offers companies the chance to have their approach to quantum computing validated, he said.

“Investors … want to get into quantum, but trying to decide which approach is the best is difficult. The QBI program allows investors to look at the results,” Weedbrook said.

Xanadu this week announced plans to go public by merging with U.S.-based Crane Harbor Acquisition Corp., a special purpose acquisition company (SPAC). The deal will value the combined company at US$3.6 billion and raise US$500 million from investors like California chip giant Advanced Micro Devices Inc., BMO Global Asset Management, and CIBC Asset Management.

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Nord Quantique said last month that it is “seeking capital and looking everywhere,” according to co-founder and chief executive Julien Camirand Lemyre.

Lemyre said that his company is open to discussions with federal investors, the U.S. included, given that “the U.S. is really treating quantum seriously.”

In the federal budget 2025 released this week, the Canadian government outlined its commitment of $334.3 million over five years to support Canada’s quantum industry. Ottawa has also said that a “major quantum initiative” will be announced later this month.