On October 3, 2025, California Governor Gavin Newsom signed Assembly Bill 940 into law, with the announcement of new funding in an effort to establish a unified strategy in the state to help continue growing the quantum technology industry. AB 940 seeks to build on the state’s established presence in the sector: California is home to both National Science Foundation and US Department of Energy quantum federal research centers. Faster-than-expected innovation could see a surge in the quantum technology economy not just in California but the global economy overall.
Quantum Computing – A Brief Refresher
Quantum computing, one of our must-watch tech innovations for 2025, is founded on quantum mechanics principles that can solve problems exponentially faster and in ways not possible with traditional computers. Quantum technologies provide novel ways to process and store information and are becoming essential for various emerging technology applications, including encryption and advanced scientific research.
AB 940 – California’s Approach and Mandate
AB 940 is part of California’s overall strategy to formalize the state’s future economic outlook, specifically building on the state’s Jobs First State Economic Blueprint.
AB 940’s mandate sets a goal of creating a statewide approach in California to transform quantum research into a viable industry output. Pursuant to AB 940, the Governor’s Office of Business and Economic Development (Go-Biz) is directed to create industry-specific strategies to strengthen California’s economic competitiveness in quantum technology and other emerging technologies through efforts to promote a strong talent pipeline, foster new research and development, and create opportunities for growth in these technologies throughout the state.
Go-Biz must prepare a quantum technology industry strategy for California by July 1, 2026 outlining the current state of the industry, barriers to growth, and actions intended to attract investment and jobs. The Governor’s Office is also backing this directed economic approach with significant investment; $4 million in new state funding for quantum research and innovation has been set aside as part of California’s 2025–2026 budget.
Beyond California – A Global View of Quantum Technology
The United Nations designated 2025 the International Year of Quantum Science and Technology in celebration of 100 years since the initial development of quantum mechanics. However, it is the next decade of quantum technology that may prove the most significant—at least economically speaking—in the field’s history. According to McKinsey’s fourth annual Quantum Technology Monitor, the three core pillars of quantum technology (quantum computing, quantum communication, and quantum sensing) could together generate revenue up to $97 billion by 2035.
Similar to AI, the effects of quantum technologies on the economy will be varied and widespread but the chemicals, life sciences, finance, and mobility industries will likely see the most growth from the technologies’ adoption.
The report indicates that it is no surprise states such as California are bolstering their investment in and approach to quantum technology, seeing as governments at a variety of levels announced $1.8 billion in funding for all types of quantum technology endeavors in 2024.
This includes a $620 million financial package by the Australian government and a $500 million dollar investment by the State of Illinois for the development of a quantum park. Public sector investment continued to accelerate into 2025 as Japan announced a $7.4 billion dollar investment in the quantum technology sector.
A New Addition to the ‘As a Service’ Model
Customers and vendors alike will be familiar with the transactions to develop and procure SaaS (software-as-a-service), PaaS (platform-as-a-service) and similar “as-a-service” solutions, but companies may soon be familiarizing themselves with QaaS: quantum-as-a-service. QaaS is becoming an increasingly viable options for organizations that wish to experiment with quantum technology while simultaneously minimizing significant economic outlays associated with establishing internal quantum computing operations.
While the market is still in the early stages, organizations in industries such as pharmaceuticals and biotech, automative and aerospace design, and financial services are considering how QaaS may strengthen their operations and identifying potential early use cases. As the market continues to develop, we will be tracking how the market standards for key provisions from typical SaaS arrangements (such as service levels, data usage restrictions and security commitments, and limitations of liability) develop in the context of QaaS agreements.
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