Quantum Leaps
Dual remarkable quantum breakthroughs bring promise to error correction and faster computing
Good morning,
For those of you in the United States, welcome back from the Independence Day holiday weekend. We hope it was as awesome as Mark Zuckerberg’s weekend spent dressed as Sam the Eagle while surfing (but don’t confuse this avian surfer with the nearly-as-patriotic Sam Eagle from the Muppets) .
The summer sprint is on before VCs everywhere check out for August to disappear to Amalfi or Ibiza for vacation exodus (yes, we’re being cheeky—we know they’re often still working, even on ‘vacay’). Fundraising announcements haven’t slowed down, with $5B going to Elon Musk’s xAI and $1B to Surge AI this week alone.
Speaking of Elon Musk, he’s announced his intention to create the ‘America Party,’ positioning it as an alternative to the Republican and Democratic parties. This comes after a falling out with President Trump over the ‘Big, Beautiful Bill’ and marks a break from the MAGA-aligned wing of the GOP. Tesla’s stock is down 8.5% following the announcement, after previously recovering from the downturn it experienced during Musk’s focus on DOGE. That earlier dip was driven by two main factors: consumer frustration over his DOGE involvement and concerns about his divided attention affecting Tesla’s operations.
On the quantum front, this week brought some remarkable breakthroughs. For the first time, researchers have demonstrated unconditional, exponential speedups over classical computers—meaning that as you add variables to a problem, a quantum computer’s advantage over a classical one roughly doubles at each step. Until now, quantum gains had been limited to polynomial speedups.
At the same time, Canadian startup Xanadu made a significant leap by encoding a Gottesman–Kitaev–Preskill (GKP) state directly onto a semiconductor. GKP states allow binary data (0s and 1s) to embed in continuous bosonic modes (like oscillations), enabling automatic error correction at the qubit level. This could drastically reduce the need for large, redundant qubit arrays—offering more compute power with fewer physical resources.
We’re far closer than many realize to practical, room-temperature quantum computing. And we need to be prepared—because when it arrives, it will open up both immense opportunities and serious vulnerabilities.
News Headlines
Elon Musk forms new political party following split with Trump (NPR)
Pentagon spokesman: we set back Iran's nuclear program by up to 2 years (DN)
US completes deportation of 8 men to South Sudan after weeks of legal wrangling (AP)
American strikes on Iran reverberate in China, North Korea (AP)
TikTok is building a new US app ahead of expected US sale (TI)
China snaps up mines around the world in rush to secure resources (FT)
Quantum Tech
Quantum, AI, and space anchor Pentagon's deep tech convergence strategy (QI)
QCs just reached the 'Holy Grail' -- no assumptions, no limits, exponential speedup (STD)
Small, room temp QCs that use light are on the horizon after breakthrough: scientists (LS)
Light 'squeezing' tunable tabletop system could revolutionize quantum sensing (IE)
Quantum-enhanced supercomputers are starting to do chemistry (NS)
E.U. Quantum Strategy to shield critical sectors, advance chips pilot lines with $59M investment (IC)
AI / ML
Graph neural networks are posed to be the next big thing in AI (AIM)
U.S. Army to create new AI-focused career field (MIL)
Senate struck AI regulation ban from Trump's megabill (RT)
E.U. sticks with timeline for AI rules (RT)
NanoTech / Chips
Chip design software firms climb as U.S. lifts curbs on China exports (RT)
U.S. plans AI chip curbs on Malaysia, Thailand over China concerns (BBG)
Microsoft scales back ambitions for AI chips to overcome delays (TI)
AR / VR / XR
This Chinese 'school' uses VR to teach robots to complete tasks (IE)
Multisensory VR forest reboots brain and lifts mood: study (SD)
Deal Flow
Funds
Menlo Ventures plans to raise $1.4B for a new set of funds to invest in AI (WSJ)
Omnes Capital raised $132M for its second deep-tech fund (QI)
VC
Musk's xAI raised $5B in new equity, $5B in new debt (TC)
Surge AI, a data-labeling firm that competes with Meta-backed Scale AI, is seeking to $1B in its first capital raise (RT)
AI-voice platform Eleven Labs raised a $180M Series C led by a16z—Building our Future uses Eleven Labs tech for its podcasts (CNBC)
Lovable, a Swedish AI startup enabling users to build full stack web apps from simple prompts, raised a $150M+ round at a ~$2B valuation led by Accel (TC)
Genesis AI, a startup build a foundational model for robotic data, raised a $105M seed round led by Eclipse and Khosla Ventures (PRN)
Eindhoven Univ of Tech spinoff EFFECT Photonics raised a $72.7M Series D for photonic chip fab (SilC)
Portal Biotech, a UK AI-powered diagnostic device capable of detecting pathogens at the molecule level, raised a $35M Series A co-led by NATO Innovation Fund (GN)
Qedma, an Israeli quantum startup, raised a $26M Series A led by Glilot Capital Partners (TC)
Emerald AI, a platform that enables AI data centers to switch between on and off grid power sources, raised a $24.5M seed round led by Radical Ventures (PU)
Indian startup Maieutic Semiconductor raised $4.15M in seed funding from Endiya and Exfinity to tackle chip design bottlenecks (TIA)
Dutch AI platform Balthazar raised a $1.4M pre-seed round from VC Antler to build an OS for DeepTech R&D labs (EUS)
PE / M&A / Exits
Chinese AI chip startups Moore Threads and MetaX plan to raise a combined $1.7B in China IPOs (RT)
Malaysian semiconductor designer SkyeChip is close to a Malaysia IPO that could fetch a $240M valuation (BBG)
Semiconductor maker Wolfspeed filed for files for Chapter 11 bankruptcy, causing shares to rally 70% (RT)
Opportunities
The Army Research Laboratory is looking for research focused on quantum characterization, calibration, and control (SAM)
Editor’s Picks
The STEAM Zone is a new show covering top stories, headlines, and media takes across American science, tech, engineering, AI and manufacturing -- with a special focus on defense. Check out the segment featuring Building our Future’s founding editor (Youtube here) and the weekly media rundown here.
The Diplomatic Insight researcher Zamzam Channa thinks that quantum tech could have profound impact on nuclear deterrence.
Lighter Side
Keep Building,
BOF