Ep 8: Israel's $5 Billion Quantum SPAC Bet

Today on Quickly Quantum: two of Israel's best-funded quantum startups are reportedly circling Wall Street, each chasing valuations as high as five billion dollars — despite having almost no revenue to show for it. Before that, in the headlines: the world's first quantum heat engine built inside a superconducting circuit, a silicon qubit result out of QuTech that could quiet one of spin qubits' oldest noise problems, a French error-correction trick that could make one of fault-tolerant computing's biggest cost centers dramatically cheaper, fresh corporate cash flowing into a Japanese neutral-atom startup, a sobering cost comparison from Alice & Bob on just how expensive quantum error correction really is, and a viral Google Quantum AI clip that's — — actually about a year and a half old. Welcome back to Quickly Quantum, your daily brief on the quantum frontier. It's Monday, July 13, 2026. Let's get into it.

Let's start with something genuinely elegant out of Finland. Researchers at Aalto University say they've built the world's first cyclic quantum heat engine inside a superconducting circuit — and before you tune out at the word 'engine,' here's why it matters. A heat engine, in the classical sense, is anything that takes heat and turns some of it into useful work, like your car's engine turning fuel into motion. The Aalto team did the quantum version of that using a transmon qubit — the basic building block in superconducting quantum computers, the same family IBM and Google use — paired with a device called a quantum-circuit refrigerator. Running what's known as a quantum Otto cycle, a repeating heating-and-cooling sequence, they actually extracted positive work from the system, and the result is published now in Nature Communications, peer-reviewed, corroborated across multiple outlets — no hedging needed here. Now, why should you care if you don't own a quantum computer? Quantum processors run cold, really cold, near absolute zero, and cooling and reading out thousands of qubits at once is one of the biggest engineering headaches standing between today's small machines and tomorrow's massive ones. A working quantum heat engine is a proof of concept, not a product — nobody's ripping out dilution refrigerators tomorrow. But it cracks open a door toward on-chip thermal management that could, years down the line, ease the cooling and readout burden as these systems scale into the thousands and eventually millions of qubits everyone in this industry is chasing. File this one under early but promising — the kind of physics result that won't move any stock price today but might quietly reshape hardware roadmaps five years from now.

Now, from Finland to the Netherlands, and from superconducting circuits to silicon. QuTech, the quantum research institute tied to Delft, is reporting a number that matters a lot if you're following spin qubits — the version of quantum computing built from single electrons trapped in silicon, the same material your laptop's chip is made of, which is a big part of the appeal, since it means these qubits could eventually piggyback on decades of existing chipmaking infrastructure. The headline figure is seven hundred sixty micro-electron-volts of what's called valley splitting, achieved through tighter quantum confinement. Now, what on earth is valley splitting? In silicon, electrons can settle into one of two nearly identical low-energy states called valleys, and when those two states sit too close together in energy, it becomes a nasty, hard-to-predict source of noise that's dogged silicon qubits for years — one of the real reasons silicon has lagged behind trapped ions and superconducting qubits in the qubit-count race, even though it's, on paper, the most manufacturable platform out there. A bigger valley split means more breathing room between those states, less noise leaking in, and a more robust, longer-lived qubit. This comes to us via Quantum Zeitgeist as a single source, and we haven't independently confirmed the specific number beyond that report, so treat it as provisional rather than settled. But if it holds up under scrutiny, it's a real chip-level advance for a platform that, frankly, badly needs one to stay in the conversation with its flashier rivals.

Sticking with error correction for a second, researchers at Institut d'Optique in France have a result that's very inside-baseball but genuinely useful if you care about building fault-tolerant quantum computers — machines that use error correction to stitch many noisy physical qubits into fewer, far more reliable logical qubits. The team developed new quantum group codes that cut decoding time, the computational effort needed to figure out which errors happened and fix them, from scaling with the cube of a key system-size parameter down to something close to quadratic. In plain English, that's the difference between a bottleneck that gets brutally worse as you scale up and one that gets only moderately worse, which is the kind of gap that decides whether an approach is usable at real scale or just a nice theorem. They also report cutting the cost of magic-state distillation by nearly a linear factor. Magic-state distillation is the expensive process of purifying special quantum states needed to run certain gates, called non-Clifford gates, that ordinary error correction can't protect on its own — and it's widely considered one of the biggest resource hogs in any fault-tolerant design, in some estimates eating the majority of a quantum computer's total qubit budget. Shave that cost down meaningfully, and you shave down the size of the entire machine you need to build to get useful work out of it. This is reported by Quantum Zeitgeist as a single source, so we haven't independently verified the specific numbers, but the underlying math — quasi-quadratic decoding instead of cubic — is the kind of claim the field tends to check pretty quickly once a preprint starts circulating widely.

And since we're already on the subject of error-correction overhead, Alice & Bob, the French cat-qubit company, just put out a comparison worth sitting with for a moment. Here's the quiet part nobody says loudly enough: they stacked the cost of classical error correction, the kind your laptop's memory runs constantly without you ever noticing, against the overhead of quantum error correction as it stands today. The gap, by their own published numbers, is stark — classical error-correcting memory is cheap and essentially invisible, while today's quantum error correction is enormously resource-hungry by comparison, chewing through many physical qubits for every single logical qubit it produces. Now, Alice & Bob has skin in this game — they build cat qubits specifically because the design is meant to suppress a whole category of error directly in the hardware, before you ever reach the software layer of error correction, so a stark cost comparison also happens to double as a pretty good advertisement for their own approach. That doesn't make the underlying math wrong, but it's worth knowing who's doing the counting before you take the numbers at face value. This is single-sourced to Alice & Bob's own publication, so we're relaying their figures rather than independently verifying them. Still, the broader point lines up with what most of the field already says out loud without any marketing spin attached: error-correction overhead remains the single biggest tax standing between today's noisy machines and tomorrow's fault-tolerant ones, and any approach — theirs or a competitor's — that promises to shrink that tax bill deserves real scrutiny, both for the promise itself and for who's the one making it.

Now, let's follow the money for a second, because it's about to matter a lot in our main story. Yaqumo, a Japanese startup building neutral-atom quantum computers — atoms held in place with laser light instead of electromagnetic traps or superconducting circuits — just added two heavyweight names to an extension of its seed round: JIC Venture Growth Investments and, notably, Toyota Invention Partners. Yes, that Toyota. This is single-sourced to The Quantum Insider, so treat the specific details as reported rather than fully confirmed, but the pattern itself is bigger than any one company. Corporate strategic capital — car makers, chip makers, cloud giants — is increasingly showing up on the cap tables of early-stage quantum hardware startups, not just specialist quantum venture funds who've historically dominated this space. That's a meaningful signal: big industrial players want a seat at the table before the technology fully matures, not after, which suggests they see quantum as strategically important enough to get in early even at seed stage, where the risk is highest and the payoff, if any, is furthest away. It's the same underlying appetite for exposure to quantum computing that's about to show up in a much louder, much more public way in our main story — where two Israeli companies aren't quietly raising a seed extension, they're reportedly talking directly to Wall Street.

One more before we get to the big one, and this is as much a public-service note as it is a story. If you've seen a clip floating around X of Hartmut Neven — he runs Google Quantum AI — talking about the Willow chip, error correction, and the timeline for encryption-breaking quantum computers, hold on before you get too excited. @SciTechera posted on X calling it 'big, really big,' summarizing that researchers from Google Quantum AI and Google DeepMind built an AI system that keeps the hundred-five-qubit Willow processor optimized while it's running — a step, in their framing, toward fault-tolerant machines that can run with minimal human intervention. And @zodchiii, also on X, framed the same interview as Neven revealing why quantum computers keep missing deadlines, teasing a moment in the video about an encryption timeline Google had supposedly moved up. Here's the problem: this interview and these results trace directly back to Google's original Willow announcement from December of two thousand twenty-four — the below-threshold error correction result that made headlines at the time. It's recirculating now, dressed up to look fresh, and neither post is describing anything that happened in the last day or two. I get why it spreads — Neven's a compelling talker and Willow was a genuinely big result when it landed. But part of this show's job is telling you when 'new-looking' isn't the same thing as new. So consider this the receipt: real result, old news, recirculated with a new caption.

Our main story today, and I'm calling this one Israel's Quantum SPAC Moment — because that's exactly the tension at the heart of it: can a country with a stacked scientific bench finally convert that pedigree into a marquee Wall Street listing? According to Calcalist, corroborated by Ynet, two of Israel's best-funded quantum computing companies, Quantum Art and Classiq, are in advanced talks to go public through SPAC mergers — special purpose acquisition companies, which are basically publicly traded shell companies that merge with a private business to take it public faster than a traditional IPO. The numbers on the table are eye-catching: each company could be valued somewhere between two billion and five billion dollars. Now, let's be clear about who these companies actually are, because they sit in very different parts of the quantum stack. Quantum Art, founded in 2022, builds trapped-ion hardware — quantum computers where information is stored in electrically charged atoms held in place by electromagnetic fields, an approach researchers generally rate highly for the quality of its operations, even if scaling it up remains genuinely hard. The company employs about sixty people, recently raised a hundred forty million dollars, and has raised roughly two hundred million dollars total. Its founders include Dr. Tal David, who used to run Israel's national quantum computing program, Professor Roee Ozeri of the Weizmann Institute, and Dr. Amit Ben-Kish, who did his doctorate under Nobel laureate David Wineland — about as blue-chip a pedigree as trapped-ion quantum computing has to offer. Classiq, founded in 2020, is the software half of this story: it builds tools meant to let organizations write quantum applications that run across different hardware, essentially aiming to be the operating-system layer for quantum computing, the way something like Windows or iOS sits between you and the hardware underneath. Classiq's customer list already includes Nvidia, Microsoft, Amazon Web Services, BMW, Rolls-Royce, and Citi, and industry estimates put its annual revenue in the tens of millions of dollars — considerably ahead of most quantum startups at this stage of the game. Here's the bigger picture this fits into. Five quantum startups have already gone public through SPAC mergers since the start of this year, and five more, including these two, are reportedly in advanced talks right now. Add it up and the already-listed quantum companies are collectively worth around seventy billion dollars, with IonQ and Quantinuum each sitting near twenty billion. Roughly thirty SPACs, according to the reporting, are actively hunting for quantum targets at this very moment, including one founded by Tom Livne and Eyal Waldman that just raised a hundred seventy-two million dollars. A successful deal could inject somewhere between two hundred and three hundred million dollars into either Quantum Art or Classiq almost overnight — money that, in this industry, buys engineers, lab time, and years of runway. And despite Israel producing an outsized share of the world's quantum startups relative to its size, the country has never had a marquee public quantum listing. This would be a genuine first.

So here's my read on this, and it starts with a caveat straight from the reporting itself: both Quantum Art and Classiq declined to comment, which means everything here is sourced to 'people familiar with the discussions,' not official confirmation from either company. That matters, because SPAC talks fall apart or get repriced constantly between the leak and the ink. Now, the reaction online has mostly latched onto the headline number. @ATURULLAO4, an individual investor posting on X, put it simply: '$IONQ Israeli quantum startups Quantum Art, Classiq in talks for Wall Street listings at up to $5B each.' That's the framing most people are reacting to — big number, big names, tag it with a ticker, move on. And I get the excitement; five billion dollars for a company built partly on trapped ions and partly on software that doesn't yet run on hardware powerful enough to matter commercially is a genuinely wild sentence to say out loud. But here's what the quick reaction misses, and it's the part I keep coming back to: neither company generates meaningful revenue yet. Classiq's tens of millions in estimated annual revenue is actually strong by quantum-startup standards, and even that doesn't come close to justifying a multibillion-dollar valuation on fundamentals alone. For comparison, and this is the number the reporting itself points to: Rigetti trades near seven billion dollars in value on roughly seven million dollars in annual revenue. That's not a typo, and it's not really a knock on Rigetti specifically — it's the going rate for admission into the public quantum club right now. Valuation, in this sector, is trading almost entirely on story and scientific pedigree rather than income statements. And that pedigree is real, which is the part of this story I don't want to lose in the skepticism. Israel has roughly twenty quantum companies out of about two hundred seventy worldwide, with something like eight hundred million dollars invested in Israeli quantum companies to date. That's a genuinely deep bench of scientific talent. What Israel has never had is the Wall Street exit to match it — no marquee public quantum listing, ever, despite that concentration of expertise. So this isn't really a story about whether Quantum Art or Classiq deserve five billion dollars on today's numbers. It's a story about whether the SPAC window — thirty of them hunting for targets, remember, including one from Tom Livne and Eyal Waldman that just closed a hundred seventy-two-million-dollar raise — is wide enough for Israeli deep tech to finally walk through. And if either deal closes, that's two hundred to three hundred million dollars in fresh capital landing in an Israeli quantum lab almost overnight, which is not nothing, even with a generous valuation attached. The lingering risk nobody's saying out loud enough: the last time a wave of unprofitable tech companies rushed public through SPACs, back in 2021, it ended badly for a lot of retail investors left holding the bag once the hype cooled. Israeli companies sat that one out. They're not sitting this one out. Time for the Hype Check. The scientific pedigree here is genuinely elite, the software customer list is real, and the capital need is real too — but two multibillion-dollar valuations resting on pre-revenue or barely-revenue companies, confirmed by nobody actually involved, sourced to 'people familiar,' in a sector already trading at Rigetti-style multiples, is a lot of story stacked on not much balance sheet. I'm putting this one at a 4 out of 10 on substance.

These are threads worth pulling on all week — watch whether Quantum Art actually files before the end of this year, and whether Classiq takes that extra private round instead of jumping straight into a SPAC. If this show's earning your time, follow it wherever you're listening — new episodes drop every day. That's Quickly Quantum for today. New episodes every day. This is an AI-voiced podcast, created and built by a real person using today's cutting-edge technology. And remember: nothing on this show is financial advice. I'm Brian Lampert — see you tomorrow.