Easily hacked secret data, enemy missiles that are more accurate and much harder to intercept-this could be Israel’s new reality if it loses its edge in the global quantum race. Recognizing the urgency, the Israeli government invested roughly $338 million at the start of the decade in a national quantum technology program, placing Israel among the world’s top ten investors in the field. Determined not to fall behind, as happened with AI, Israel sought to secure strategic superiority. But the program is nearing its end, no successor has been announced, Israel has already slipped out of the Top 10, and its early advantage is now at risk.
The world has long understood that quantum capabilities will be a tie-breaking weapon, and the race is at its peak. Against the backdrop of competition with China, the US Trump administration has directed that AI and quantum should be fundamentals of the 2027 R&D budget. Security tops the list of priorities, followed by space and energy, with a goal of accelerating quantum capabilities in these sectors.
In Europe, long seen as focused mainly on issues like the environment before the Russia-Ukraine war, an EU policy paper published last July placed security at the center of its quantum strategy. This comes in addition to the more self-evident priorities: R&D, infrastructure, ecosystem development, and building core capabilities.
You may not have noticed, but we are already in the midst of the second quantum revolution. The first gave rise to technologies such as atomic clocks. Unlike what happened with AI, Israel woke up early on, and in 2018 launched a $61 million program to advance quantum science and technology. Two years later, this evolved into the National Quantum Science and Technology Program , backed by the aforementioned $338 million investment.
It's a handsome sum, but a drop in the ocean compared with other nations’ investments in the sector, which amount to about $56.7 billion. According to quantum business development and professional services consultancy Qureca , Israel’s domestic investment far exceeds that of countries such as Qatar ($10 million), Austria ($123 million) and Italy ($262 million), but Israel lags far behind the UK ($5.49 billion), the US ($7.67 billion) and China ($15.3 billion).
"China or Iran could hack our encryptions"
But wait - where is everyone running to? Quantum theory (also known as quantum mechanics or quantum physics) took shape in the 1920s to describe how the world behaves at the tiniest, subatomic scale. It describes phenomena that defy earlier physical theories and seem almost impossible to human minds: particles that exist in two states at once, appear in different places simultaneously, or influence each other from afar
We already see quantum science in everyday technologies, from lasers to semiconductors to MRI machines. But in recent years, the field has expanded into areas that could, without exaggeration, change the world. These include quantum communication and encryption, development of new materials, super-sensitive sensors, and perhaps most importantly, quantum computers, which operate in a fundamentally different way from the computers we know today
In Israel, perhaps unsurprisingly, the Ministry of Defense is one of the leaders of the quantum program, along with the Ministry of Science, the Ministry of Finance, the Planning and Budgeting Committee of the Israel Council for Higher Education (VATAT), and the Israel Innovation Authority. At the Ministry of Defense, the branch is led by Dr. Nadav Cohen , head of the Science and Technology Unit (IMOD) at the Directorate of Defense Research & Development (DDR&D / MAFAT).
"Quantum computing is based on a new operating system of reality," Dr. Cohen says. "It uses some fundamental criteria of the quantum world to help us solve certain problems at speeds classic computers will probably never be able to reach."
In classic computers, the smallest unit of data is a bit, which can contain the value 1 or 0. But a qubit, the smallest unit in quantum computing, can be both 0 and 1 and intermediate states at the same time. "To all of this we add an element that we call interweaving," he explains. "I can take two or more particles and make them behave like a single, connected particle. Given the capabilities of qubits, that connection creates many possibilities in quantum computers that classical computers will never be able to match."
So how might quantum technologies fit into the security world? First, encryption. Today’s encryption systems rely on algorithms based on multiplying two numbers. When only the final result is given, there is no practical way to recover the original numbers and break the encryption. But a quantum algorithm known as Shor’s algorithm changed that, demonstrating the ability to factor numbers rapidly and crack passwords and encryption.
Nir Minerbi , founder and CEO of Classiq Technologies, which develops software tools for quantum computing, emphasizes the problem: all secrets-nuclear, intelligence, and government-could become accessible to anyone. "China or Iran could hack us, and it would be earth-shattering. If encryption methods aren’t changed, they could be hacked. These are capabilities far beyond what supercomputers, even the most advanced AI, can achieve."
The Australian Navy successfully tested quantum navigation sensors that could effectively replace GPS. The system is based on measuring minute changes in the Earth’s gravitational field and is capable of resisting disruptions, like those that make GPS vulnerable. As is well known, precision is a highly valuable asset when it comes to security.
Miriam Shtilman , a partner at Tal Ventures and the Israeli representative to the European Quantum Flagship program , gives another example of the impact that quantum computing can have on security: "Quantum can improve complicated calculations such as identifying missile barrages, and increase interception rates. So its clear that here, defense will come first."
"We missed out on AI. We can’t miss out on quantum"
Quantum is a key part of the deep-tech industry, which focuses on developing technologies to solve significant scientific and engineering challenges. Assaf Wise , a partner and CTO at venture capital fund Earth & Beyond Venture s, which specializes in the field, notes that the State of Israel is the world's largest per capita investor in deep-tech. At the same time, he says, "It doesn't invest much in quantum, in comparison with the leading countries, and the government's investment in the field is a drop in the ocean.
"One of our startups raised more than $30 million. The Innovation Authority also participated in the round, but in the end, most of the funding came from private investors. This sum is higher than what the State of Israel has directly invested in each of the defense companies to advance quantum computing."
There are more than twenty quantum companies operating in Israel, most of them computing startups. Dr. Cohen estimates that, alongside the state's investment, these companies have raised almost $700 million. Although this is almost twice the investment by the state (about $338 million, as mentioned), the latter is critical for providing the sector with both security and vision. This investment is managed and directed in accordance with the needs of the state by the TELEM Forum (the forum for national infrastructures for research and development), which includes representatives from the Israel Academy of Sciences and Humanities, the Israel Council for Higher Education (VATAT), DDR&D/MAFAT, the Israel Innovation Authority, the Ministry of Innovation, Science and Technology, the Ministry of Finance, and the Ministry of Defense.
"Israel has an excellent infrastructure in academia. It’s among the top ten, if not better, in the world," says Wise. "Quantum Machines raised $200 million, Quantum Art and Quantum Source are leading groundbreaking technologies in ion- and photon-type quantum computers. There are significant investments in the field in Israel, and investors know why they put their money here. It arises from a great deal of activity, knowledge, and technological capabilities, at international standards."
Today, Israel stands at a critical crossroads for its future in general and its security future in particular. On the one hand, the number of companies has quadrupled and the number of academic groups engaged in the industry has doubled. However, as mentioned, the budget is expected to run out at the end of this year. The forum therefore appointed a committee tasked with formulating a follow-up plan. Until it convenes and submits its recommendations to the government, the future remains uncertain.
Shtilman says that after Israel missed out on AI, "In quantum, you cannot afford to miss-there will be no second chance. The frenzy we see in AI with global funding for talent is just a preview of what’s coming in quantum. You can’t train someone like this in less than 15 years; it’s not an education you can provide through a course. Another challenge is the scale of resources needed to establish a company in the field, often tens of millions of dollars just in the initial stage, an amount difficult to raise in the Israeli market and requiring resources from abroad."
In the race for quantum capabilities, even good friends don’t care to share knowledge with one another. This is true for Israel as well, says Dr. Cohen, "We are starting to discuss regulations, barriers, so as not to transfer know-how. In other words, if I have knowledge, I want to keep it within the borders of the State of Israel."
Within the Israeli industry, however, QUBIT IL was established to create a quantum community where members support and nurture one another. Shtilman sits on the board, the goal of which is to establish Israel as one of the sector’s top ten countries. ‘This is a special environment where most startups don’t step on each other’s toes and there is much mutual assistance. Israel’s high-tech culture grew out of collaboration, and the same can be seen in quantum as well."
Classiq, which develops the software infrastructure for quantum computing, is one of the most significant players in the Israeli quantum industry, and has already raised about $180 million. According to founder and CEO Minerbi, no other country has a G2G culture like Israel’s, something that is important for the sector.
He also emphasizes, "Quantum computing is a whole new world. All the computers we’ve known for the past 70 years share the same DNA, whether more or less powerful. A quantum computer is an alien being, opening the door to applications that are almost unimaginable. Solving problems that would take a conventional computer a billion years are now possible, which is generating excitement across industries-defense, automotive, and chemistry. Developing new materials requires complex simulations, and this has long delayed the defense sector. Now, processes that once took 15-20 years could be dramatically shortened."
The cost to Israel’s defense industry - and the risks
Deeply involved in developing Israel’s quantum sector, even if they try to keep it under wraps, are the major defense companies. "We are just two years away from quantum computers capable of doing incredible things, and we don’t yet understand the full extent, " a senior defense official told "Globes." "We’re at a world-class level in encryption capabilities, unlike in AI, and the entire quantum field could break AI. What a single quantum computer can do, even massive data centers can’t, and this could close Israel’s AI gap."
Dr. Cohen explains that the IDF is working with all parties -- the major defense industries, Elbit, IAI and Rafael, academia, and startups -- to create the ideal consortium. "The large defense companies are part of Israel's development in the quantum sector. There are certain entities within these companies that conduct research at an almost academic level. They also publish very beautiful scientific papers."
Wise is intimately familiar with the defense establishment. He served in a technological unit of the Intelligence Corps and was discharged with the rank of lieutenant colonel having led projects and operational R&D. He then led an international industrial-technological company as CTO. "The defense companies hold an important place in the technological ecosystem because they are willing to bear the cost of the initial development process in order to maintain an advantage over the other side. By contrast, the private sector is unlikely to pay before a technology is fully mature. The defense industry plays a key role in adoption, advancing technologies already at the early stages."
Wise says that the civilian and defense worlds can have a synergistic relationship. "Most of the work in quantum computers is civilian rather than military, but behind the scenes, countries around the world are taking note. I tell the CEO of the quantum computer we invested in: the day he puts one on the table is the day he will receive the full attention of the state and of the Defense Export Control Agency (DECA). You’ve created a strategic capability like an atom bomb, but if Israel fails to invest and take the lead, it could be too late."
Minerbi says DDR&D/MAFAT is at the forefront of quantum. "Think about what would happen if we, as a country, were not prepared with strategic weapons, or alternatively, what we would be able to do with such capabilities on the offensive level. Many times, defense precedes the civilian sector. With the help of quantum, there is an opportunity to leverage the country's interests internationally."
Looking globally, while Israel is still debating whether to create a national follow-up program, other countries have long since moved ahead, and even beyond. As an interesting example, Shtilman points to UKQuantum , an organization representing the UK’s quantum industry, considered one of the most impressive. "There are questions such as: what percentage of GDP does a country invest, is the investment focused on a specific field or spread across several, how is it managed, and is it even effective? Saudi Arabia put in a great deal of money, but it’s hard to know if that’s produced the desired results. For countries and corporations, it’s clear this is an international race with no tomorrow."
Quantum computers have not yet become a proven product, due to what Dr. Cohen calls "technological brakes," starting with the qubits. ‘A qubit doesn’t like being in two states at once; it prefers to be in only one. Any interaction with the environment will cause it to collapse into one state or the other. This means that if the computer heats up, it crashes. If cosmic radiation hits it, it’s affected. It’s extremely difficult to isolate the computers from their surroundings, which is why they are placed in refrigerators that bring them very close to absolute zero. These are magnetic cages that dampen the effects of magnetic fields."
The second major limitation is still resources. "All these complex processes cost a lot of money," says Dr. Cohen. "The world puts lots of money in, but in the end the question is, 'How much is a lot?' In numbers, we're talking about tens of billions of dollars at the multi-year level, and still, that's probably not enough."
Published by Globes, Israel business news - en.globes.co.il - on November 16, 2025.
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