Emerging AI and Quantum Tech Startups

In This Week’s Belamy. India’s AI story is shifting from announcements to ownership of the stack. At the model layer, BharatGen led by Rishi Bal and founded by Ganesh Ramakrishnan is training Param2 17B across 22 languages, while Sarvam AI, founded by Vivek Raghavan and Pratyush Kumar, has launched Sarvam 30B, 105B and Indus, alongside state-level sovereign AI infrastructure deals. Specialists are emerging fast. gnani.ai under Ganesh Gopalan is deploying voice-first agentic systems. Genloop led by Ayush Gupta and Soket AI Labs under Abhishek Upperwal are building India-centric foundation models. ZenteiQ.ai founded by Prof Sashikumaar Ganesan is embedding physics-aware AI into manufacturing. Shodh AI, led by Arastu Sharma, is building autonomous AI-driven labs with NVIDIA. At population scale, Wadhwani AI under Shekar Sivasubramanian, CoRover led by Ankush Sabharwal, RevRag.AI under Ashutosh Prakash Singh, Vahan.ai led by Madhav Krishna, Staqu Technologies founded by Atul Rai, Anurag Saini, and Pankaj Kumar Sharma, and NeuroDX founded by Siddharth Panwar, Dr Dr. Puneet Agarwal, and Kailash Sati are embedding AI into public systems, BFSI, hiring, policing and healthcare. Infrastructure and frontier compute are being built by Neysa founded by Sharad Sanghi and Anindya D., and QpiAI led by Nagendra Nagaraja with India’s first 25-qubit quantum computer. The question now is scale, interoperability, and endurance. Sovereignty will be measured in systems that run reliably, not in slogans.

Something unique is happening in the world of AI/ML and quantum: young CEOs aren’t just participating in the revolution—they’re leading it. Our industry rightfully celebrates seasoned executives for their wisdom and resilience, but if we believe that even “old dogs can learn new tricks” in the Age of AI, why not believe the young ones can teach us a thing or two? To me, AI’s future isn’t about age, it’s about ideas and execution. Take William Passo and his team at Rain AI. They’re developing energy-efficient AI chips focusing on digital in-memory compute (DIMC) that has shown major promise for AI applications from training to inference – which is why a half-dozen other AI startups are using a similar approach. With heavy-hitting investor Sam Altman continually pitching Rain to VCs, I’m confident Rain is here to stay, is playing to win, and WILL take market share from Nvidia. Then there’s Gavin Uberti at Etched who is rewriting the playbook for the AI HW market. Etched made a HUGE bet saying ASICs, rather than GPUs, are the key to efficient inference, so they’ve been developing a specialized ASIC called Sohu for that very purpose. While some wrote Gavin and his co-founder Chris Zhu off as “Harvard dropouts” fast forward to today and they’ve landed top technical leaders from Cypress and Apple and have scored a $120M Series A. Try ignoring that. And look at Alan Liu at Quintessent Inc. Copper interconnects are inching ever-closer to obsolescence (credit Mark Wade for that quote) and Quintessent is redefining optical connectivity with a groundbreaking multi-wavelength quantum dot comb laser. They intend to break traditional bottlenecks by slashing power consumption, reducing component count, and multiplying bandwidth density. If they leapfrog and take share from Ayar Labs, Lightmatter, and Celestial, it won’t be by accident. In my two decades in this industry, I’ve lost count of how many leaders have griped about our decades-long talent gap. Yet they’re often the same people scoffing at the young innovators. The truth is, the future may NOT belong to those with the longest resumes, but to those with the courage to challenge “the way it’s always been done.” And forward-thinking VCs are voting with their checks. 💲Etched pulled in $120M from Primary Venture Partners and Positive Sum Ventures, with legendary angels like Stanley Druckenmiller and Peter Thiel on board.  💲Rain raised a $25M Series A led by Prosperity 7 Ventures, with Sam Altman eyeing another $140M - $150M in the near future.   💲Quintessent secured $11.5M in seed funding from M Ventures, Sierra Ventures, Foothill Ventures, and Entrada Ventures. If you're not paying attention to these young leaders, you might want to clean your bifocals – or you could find yourself playing catch-up. My advice? Lean in, listen up, and get ready to take a page or two from their books. #semiconductorindustry #artificialintelligence #startups

The Quantum Cybersecurity Revolution: A Major Startup Opportunity in 2025 As quantum computing moves from theory to real-world applications, its impact on cybersecurity is becoming increasingly clear. Quantum computers have the potential to break widely used encryption systems, creating both a significant risk and a massive opportunity for startups focused on quantum-resistant cybersecurity solutions. 1. Quantum Computing Breakthroughs in 2024 • Improved Qubit Stability: Advancements in error correction algorithms have made quantum systems more stable, enabling longer computations. • Scalability Achieved: Companies like IBM, Google, IonQ, and Rigetti have built more scalable quantum systems. • Cryptographic Threat: Algorithms such as Shor’s Algorithm could efficiently break encryption methods like RSA and ECC, which currently secure most online transactions and communications. These developments mean that once sufficiently powerful quantum computers emerge, they could render current encryption obsolete. 2. The Quantum Threat to Cybersecurity • Breaking Encryption Standards: Classical cryptographic methods rely on mathematical problems that quantum computers can solve exponentially faster. • Store-Now, Decrypt-Later Threat: Cybercriminals are already hoarding encrypted data, planning to decrypt it once quantum technology matures. • National Security Risks: Sensitive data, critical infrastructure, and financial systems are increasingly vulnerable. 3. Quantum-Resistant Cryptography on the Rise • NIST Standards: The National Institute of Standards and Technology (NIST) has shortlisted algorithms for post-quantum cryptography (PQC) to prepare for quantum threats. • Hybrid Encryption Models: Solutions combining classical cryptography with post-quantum algorithms are emerging as a practical stopgap. • AI Integration: Artificial Intelligence is being paired with PQC to detect vulnerabilities and optimize encryption protocols. 4. Startup Opportunities in Quantum Cybersecurity • Quantum Key Distribution (QKD): Creating secure communication channels resistant to eavesdropping using quantum entanglement. • PQC Software Development: Startups are developing libraries for quantum-resistant algorithms. • Quantum-Safe Infrastructure: Designing networks capable of withstanding quantum decryption attempts. • Cloud Security: Quantum-secure cloud solutions are in demand, particularly among enterprises and governments. Startups positioned in these areas are expected to see increased venture capital interest and government contracts. 5. Challenges to Adoption • Awareness Gaps: Many organizations remain unaware of the quantum threat, slowing adoption of PQC solutions. • Cost of Transition: Upgrading legacy systems is resource-intensive and technically complex. • Regulatory Uncertainty: Standards for quantum-safe encryption are still evolving globally.

Quantum funding just took a leap! But funding never tells the whole story… Quantum tech funding is already at record levels, reaching $2.2B within the first two quarters of 2025. A 69% increase from the full year 2024. Major quantum breakthroughs from Microsoft, Google, and IBM are translating into investor confidence. As big tech leaders make big progress, the demand for private companies continues to ramp. But it’s not just the funding amounts. When you look at our Mosaic scores – rigorous data science that predicts success –  it’s clear that a new class of private quantum companies is building real momentum. Notable companies, including their Mosaic score (higher is better) and fundings: 1) Q-CTRL (Mosaic 903) has raised $132.2M for quantum control software 2) SandboxAQ (Mosaic 861) has raised $950.2M for AI and quantum computing for enterprise 3) PsiQuantum (Mosaic 852) has raised $2.1B for photonic quantum computers 4) QuEra Computing Inc. Computing (Mosaic 848) has raised $247M for neutral-atom quantum processors 5) Alice & Bob (Mosaic 845) has raised $155.3M for universal quantum computers with error correction 6) Classiq (Mosaic 845) has raised $189M for quantum software development platform 7) Multiverse Computing (Mosaic 814) has raised $339.9M for quantum AI optimization across sectors The quantum sector's strong fundamentals – growing government support, increasing enterprise interest, strong partnership activity, improving management team quality, and significant technical progress – are creating a favorable environment that boosts Mosaic scores for these well-positioned companies. It’s not just VCs driving this investment surge. Corporates and governments are in there, too. → Government backing is serious: $1.8B in public funding globally, with Australia committing $620M to PsiQuantum and Defense Advanced Research Projects Agency (DARPA) pledging $200M for industrial quantum feasibility. → Corporate strategic positioning: Nearly 40% of Fortune 500 companies are now investing in quantum startups to secure first-mover advantages. We're likely years away from fault-tolerant quantum computers (industry consensus: 2030 at earliest), but the foundation is being laid. As quantum moves from "interesting science project" to "strategic imperative," early investors and partners will have significant advantages when practical quantum arrives. *Data from CB Insights' State of Venture Q2’25 report. Explore the latest data on what happened last quarter across the startup ecosystem at the link in the comments.

AI x Quantum is the new the frontier of materials innovation. The latest data on the hottest, nascent manufacturing markets highlights the companies driving breakthroughs in materials development; fueled by $1.1B in funding this year. What's driving the surge? AI and quantum computing advances are helping these platforms reach accuracy levels that can replace physical trials at a fraction of the cost and time. Key developments at the intersection of quantum, AI, and materials: ↳Full-stack integration: Radical AI combines AI, quantum mechanics, and automated chemical characterization in a single platform ↳Data management revolution: Uncountable Inc. handles experimental data collection, management, and visualization – letting researchers focus on discoveries instead of searching for data ↳Proven cost reduction: Kebotix combines machine learning with lab automation, reporting 5x reduction in lab costs ↳Quantum algorithms advancing: Qunova Computing claims their algorithms reduce computational requirements by over 1,000x compared to traditional methods ↳Infrastructure scaling: Companies like Albert Invent combine material development with laboratory information management and regulatory compliance The shift from tools to platforms is critical. These aren't just simulation tools – they're comprehensive R&D management systems positioned to replace entire suites of disparate research software. Now, we're seeing a new breed of materials companies founded by AI experts, exemplified by former OpenAI researcher Liam Fedus's Periodic Labs that just raised $200M at a $1B valuation. When AI's top talent moves into materials, it signals where the next wave of industrial innovation will emerge. SandboxAQ, the Google spinout with the highest Mosaic score (879), develops AI and quantum models to predict molecular properties. While fault-tolerant quantum computers aren't expected until 2030, companies like Quemix Inc. are developing quantum-inspired techniques providing advantages today. QpiAI notably built its own quantum computer using superconducting circuits. Broadly, these emerging platforms transform materials development from years to months by digitally testing compounds before expensive lab work begins; shifting the competitive edge from lab size to the rapidly-expanding computational limits of intelligence. P.S. Want more insights on the companies developing the future of materials? Drop "material developments" in the comments for *free* access to CB Insights' data and insights on the Material development platforms market.

Today's Riding Unicorns episode is with Ashley Montanaro, Co-Founder & CEO of Phasecraft. AI may be dominating today's headlines. But quantum computing could become an even bigger technological shift over the next decade. Phasecraft has raised over $56m from Playground Global, Episode 1 Ventures, Plural, Novo Holdings and LocalGlobe to build the software layer that will unlock the commercial potential of quantum computers. While most of the conversation around quantum focuses on hardware, Ashley explains why the biggest breakthroughs may come from the algorithms that run on top of it. In this episode we discuss: • What quantum computing actually is and why it matters • Why software could create more value than quantum hardware • The race towards practical 'quantum advantage' • How quantum and AI will work together to accelerate scientific discovery • The future of batteries, pharmaceuticals, chemistry and materials science • The cybersecurity implications of post-quantum computing • Building a deep tech company with long development cycles • How Phasecraft used over £5m of non-dilutive funding to accelerate its growth One insight that really stood out was Ashley's view that quantum won't replace #AI. Instead, the two technologies will reinforce one another. #Quantum computers could generate dramatically better scientific data, giving AI models far richer information to learn from and accelerating breakthroughs across medicine, energy and advanced materials. If you're interested in frontier technology, deep tech or where computing goes next, this is well worth a listen. Listen here: Spotify: https://lnkd.in/e8S7xxgh Apple: https://lnkd.in/ewN7wK57