Colorado is in a heated battle with Illinois to win designation as the nation’s top hub for quantum technology, with potentially $1 billion in federal support, not to mention multiple times that in economic activity, at stake.

The CHIPS and Science Act directs $52 billion in federal dollars to boost U.S. competitiveness in semiconductors and restore the country’s leadership in chip manufacturing and other advanced technologies.

The Biden administration announced Monday that it would make the first award under the act by extending $35 million to BAE Systems to increase production at a factory in New Hampshire that produces chips for military aircraft.

And while Colorado expects to land some new semiconductor plants spurred by federal dollars, the bigger prize the state is chasing is contained within a different part of the act.

Within CHIPS, $10 billion was authorized to support the development of up to 10 technology hubs in the following fields: AI, semiconductors, quantum, advanced manufacturing, disaster prevention, advanced communications, biotech, cybersecurity/blockchain, advanced energy and materials.

“The goal is to create Silicon Valleys where there aren’t Silicon Valleys today,” said Zachary Yerushalmi, chief executive and regional innovation officer for Elevate Quantum, a coalition of more than 70 companies, educational institutions, federal labs and other organizations that have banded together to bring a quantum tech hub to the region.

The Economic Development Administration at the U.S. Department of Commerce sorted through more than 400 applications from across the country to select 31 tech hubs. Out of six potential candidates for tech hubs in the state, Colorado submitted two actual applications in the first round.

Elevate Quantum’s bid was successful, while another one for a clean energy hub from the Colorado Cleanrange Consortium wasn’t chosen. A competing application out of Illinois called the Bloch Tech Hub and led by the Chicago Quantum Exchange also moved forward in quantum, setting the stage for a showdown.

While an achievement, a first-phase designation doesn’t come with direct federal funding. A second phase will further narrow the field to between five to 10 hubs eligible for between $40 million to $70 million from the $500 million appropriated for the Tech Hubs program.

If Congress eventually grants the full $10 billion, tech hubs could receive $1 billion or more, depending on how many are selected. But to get there, Colorado needs to beat out the Bloch, which has the backing of tech heavyweights like IBM and Google.

“There is a big pot of gold at the end,” Yerushalmi said, one that goes far beyond bragging rights and a boatload of federal dollars. The designation could cement Colorado’s dominance in an emerging industry that by some estimates will drive $3.5 trillion in economic activity on the computing side alone in the years ahead.

Applications for the second phase are due in February, and the EDA is expected to announce winners toward the middle of the year.

Of all the technologies the federal government is seeking to promote, breakthroughs in quantum computing would help realize the full potential in other fields like artificial intelligence, blockchain and biotech, said Frannie Matthews, the outgoing president and CEO of the Colorado Technology Association.

“I truly believe that strategically speaking, going after quantum was a really good move,” she said.

Starting in early 2025 and across the decade that follows, Elevate Quantum Labs will seek to help launch more than 50 companies, draw more than $2 billion in capital investments to the region, and train more than 30,000 workers in Colorado, Wyoming and New Mexico, Yerushalmi said.

The group’s goal is to ensure that 40% of the leadership roles in the new companies, as well as the actual jobs, go to individuals from underrepresented groups, avoiding a mistake that California made by growing its tech industry in an undiversified way.

Eve Lieberman, director of the Colorado Office of Economic Development and International Trade, described the funding opportunity as “once-in-a-generation,” adding that it would accelerate the development of “life-changing” technologies.

“A win for Elevate Quantum will be a win for Colorado, cementing our place as a world leader in quantum technology and creating good paying jobs for Coloradans — many of which do not require an advanced degree,” Lieberman said in an email.

How Colorado became a quantum leader

Quantum technology, when applied to computers, offers the promise of processing power and speed exponentially beyond what is possible today using semiconductors. Equations or simulations that would now take years to resolve with existing processing power, or that remain unsolvable, could be solved in seconds and minutes.

If conventional computing, which transformed the world in the second half of the last century, is a campfire, then quantum computing is a nuclear reactor, said Yerushalmi, trying to put the technology’s revolutionary power into perspective.

Quantum requires precisely measuring and directing the movement of atoms, something Boulder-based researchers have focused on since the 1950s at both the National Institute of Standards and Technology or NIST and the University of Colorado.

Massimo Ruzzene, CU Boulder’s vice chancellor for research and innovation, said Boulder researchers have developed optical atomic clocks that are three orders more precise than any other atomic clocks out there. The ability to measure time ultra-precisely has huge implications for navigation, environmental sensors, processing financial transactions and quantum computing.

“Our clocks will lose 1 second in the projected life of the universe. They capture atoms and measure their energy states precisely,” he said. “Quantum relies on the ability to observe atoms and monitor changes in their state.”

CU Boulder and NIST also partnered to create The Joint Institute for Laboratory Astrophysics, now called JILA, where breakthroughs have been developed in using interlocking lasers to measure light frequencies and create more precision in measuring atoms.

To measure atoms, quantum technology slows them down, which requires bringing temperatures down near absolute zero, another forte centered in Boulder. Colorado is also a leader in a particular branch of quantum computing that uses “ion traps” to bend the will of atoms.

Although researchers with doctorate degrees in physics and engineering are behind the breakthroughs, upwards of half the new quantum jobs expected to be created won’t require an advanced degree.

Technicians will be needed to align and maintain lasers, keep the extreme refrigeration equipment going, and construct the metal frames to house the computers. Yerushalmi estimates quantum jobs will pay $125,000 on average.

Elevate Quantum is working to set up training programs in schools like Front Range Community College to ensure the state has enough technicians.

Colorado isn’t going it alone with its bid. New Mexico and Wyoming are participating, which could score points with the Biden administration in terms of bringing cutting-edge tech jobs to parts of the country normally overlooked.

Besides NIST and the National Renewable Energy Laboratory in Golden, Elevate Quantum also has the support of the Los Alamos and Sandia national labs in New Mexico, as well as the Lawrence Livermore National Laboratory out in California. Thirteen higher education institutions in the region have thrown their support behind Elevate Quantum.

Colorado already has the highest concentration of quantum tech workers in the world and hosts several leading companies in the field, including Atom Computing, Infleqtion, Maybell and Quantinuum.

Although Yerushalmi remains confident that Elevate Quantum will win in the end, he acknowledges “we have our work cut out for us.”

A group focused on revitalizing Chicago’s tech economy called P33 is heading up the Midwest application. It has a $10 million budget and a staff of 18, including four people devoted full-time to working on the quantum application.

Illinois has dedicated $200 million in funding to quantum research and universities in the state are considering leaders in areas like quantum networking and some pieces of the quantum internet, Yerushalmi said. And it has developed the country’s first quantum accelerator, to promote start-ups in the field.

Chicago also has a much larger base of Fortune 500 companies to draw on for support. IBM and Google, powerhouses in quantum computing, as well as Boeing, have contributed $150 million to quantum efforts. And Illinois has teamed up with Indiana and Wisconsin to bolster its economic development credentials.

Colorado’s public support has been much more modest. In April, the Colorado Economic Development Commission awarded $1.5 million to support quantum information science and technology through the CUbit Quantum Initiative.

The EDC has earmarked $3 million for the state’s tech hub effort, and last month, the EDC released $400,000 of that to help Elevate Quantum with its phase two application. That award in turn will help unlock funds from the Walton Family Foundation and other corporate sponsors.

Yerushalmi said the Tech Hub dollars are focused on commercializing technologies that are ready to come forward, not on theoretical research. Colorado technology in quantum sensing, lasers and cryogenics are ready to scale.

“For high commercial readiness stuff, Colorado is second to none,” he said. “They have one-fifth the number of quantum computing workers and our technology is way ahead of Chicago’s.”

How not to get frozen out

Using an analogy from the state’s roots in mining, Colorado’s best chance to create lasting wealth will come from selling the picks and shovels to the emerging quantum field, allowing others to mine the gold that the power of quantum computing will unleash, Yerushalmi said.

Although an early leader, Colorado can’t rest on its past accomplishments. Yerushalmi said Bell Labs developed the early transistors that led to semiconductor chips in Murray Hill, N.J. Boston, nearby, was also an early hub in computer sciences.

But Murray Hill or Boston aren’t places that spring to mind when people think of the information technology revolution. Rather it’s Sunnyvale, Palo Alto and San Jose in California’s Silicon Valley. Nor is Bell Labs at the tip of the tongue as much as Hewlett-Packard, Apple and Google are.

“Giving up supremacy to a Silicon Valley is an example of what might happen if there is not an investment to take the science to the next level,” Ruzzene said. “As a university, we are interested in taking our discoveries and making an impact. It is critical.”

Initially developed in the U.S., semiconductor manufacturing is now more associated with nations like South Korea and Taiwan, something the CHIPS Act seeks to change. But Yerushalmi doesn’t envision Colorado becoming the Taiwan of quantum computing.

Rather a better model is found in the Interuniversity Microelectronics Centre (IMEC), a Belgium-based research and development organization specializing in nanoelectronics and digital technologies that he said is responsible for about half of the breakthroughs in semiconductor technology.

IMEC’s strength comes in its ability to rapidly prototype innovations and manufacture them at a low volume. A chip design breakthrough that might take two years to realize in the U.S. can be achieved in a few weeks in Belgium.

Next door to IMEC is ASML, Europe’s most valuable technology company. It builds the machinery to make semiconductors and other electronic components, the picks and shovels. If Boulder doesn’t want to become the Morris Hill of quantum computing, it will need to create the equivalent of an IMEC, allowing for an ASML and a host of other companies driving ongoing innovations.

IMEC’s leading and lasting role was achieved with a collaboration between academia and industry and seed funding of around $20 million back in 1984, he said. That is why winning the $75 million, and hopefully, the $1 billion, are so important, and why Colorado should keep moving forward regardless of what happens.

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