In February 2025, an Israeli company that most Israelis have never heard of raised $170 million in a single funding round. Quantum Machines, founded in 2018 by three Weizmann-trained physicists and headquartered in Tel Aviv, now supplies the control technology used by more than half the companies in the world that are trying to build quantum computers — including, quietly, inside Google’s Willow programme. Its CEO Dr. Itamar Sivan calls quantum “one of the biggest, most important technological races of our generation.” He is not wrong, and Israel is further along in that race than its political class appears to understand.

Sixteen months ago, in December 2024, Google’s Willow chip crossed the error-correction threshold — the point at which adding more qubits reduces errors instead of amplifying them, which is the technical gate that separates quantum physics from quantum engineering. The quantum transition now runs on two clocks. One is commercial: global quantum investment reached $56 billion in 2025, up from $22 billion in 2020. The other is cryptographic, and it is the one Israel cannot afford to miss.

The cryptographic clock

Every secret Israel currently holds — diplomatic cables, intelligence intercepts, nuclear command authentication, banking infrastructure — is protected by mathematical problems that a sufficiently large quantum computer, running Peter Shor’s 1994 algorithm, will solve trivially. RSA, elliptic-curve cryptography, and Diffie-Hellman key exchange all depend on factoring or discrete logarithms. A fault-tolerant quantum computer of a few thousand logical qubits breaks them.

No such machine exists today. Credible estimates for when one will range from 2030 to 2040. But the clock did not start when the machine arrives. It started the day adversaries began harvesting encrypted Israeli traffic for later decryption — what NIST calls “harvest now, decrypt later.” Consider what this means concretely. A Mossad cable transmitted this week between Tel Aviv and a European station, intercepted by a hostile signals intelligence service and stored, will be readable in 2038. The source identified in that cable will be sixty-three years old. Their children will be adults. Whatever promises of protection were made to them are already void in principle, awaiting enforcement in practice.

The Iranian nuclear archive that Mossad extracted from Tehran in January 2018 was a triumph of human intelligence. The next such archive — the adversary’s equivalent, targeting Israel — may be a triumph of patience and storage capacity. The United States has mandated federal migration to post-quantum cryptographic standards, the lattice-based and hash-based algorithms NIST finalised in August 2024, on binding timelines. The European Union and China are running comparable programmes. Israel’s post-quantum migration is proceeding, but on no publicly committed timeline. For a country whose entire security architecture rests on its signals intelligence advantage, second place is not a recoverable position.

The lead, and its fragility

Israel’s quantum ecosystem runs deeper than almost anyone outside the field realises. Quantum Machines supplies the hardware and software that orchestrates qubits in laboratories from Mountain View to Hefei. Classiq, which raised $110 million in May 2025, automates the translation of algorithms into the circuits quantum processors actually execute. Around them sits a thickening layer of smaller firms, the Israeli Quantum Computing Center that opened at Tel Aviv University in June 2024, Israel Aerospace Industries’ 20-qubit domestic machine from the same December, and 240 academic quantum research groups across the Weizmann Institute, the Hebrew University, the Technion, Tel Aviv University, and Bar-Ilan — up from 144 at the programme’s launch.

This lead is real. It is also fragile, because it rests on two inputs that are both eroding.

The first is money — and here Israel is dramatically outgunned. Its cumulative national quantum spend, running through the Israel National Quantum Initiative that launched in 2019 at NIS 1.2 billion and expired in late 2024, sits in the low hundreds of millions of dollars. The follow-up committee Innovation Minister Gila Gamliel appointed in 2025 has yet to produce a successor programme. Meanwhile, China’s national programme is estimated at $10 to $15 billion. The United States’ combined federal and private investment exceeds that. The European Union’s Quantum Flagship runs at €7 billion. Israel survives this imbalance primarily through European research funding: Horizon Europe, which Israel joined in December 2021 as the first non-European associate member, channelled more than €1.1 billion into Israeli research between 2021 and 2024 — by one Jerusalem Post estimate, between twenty and two hundred times the direct US government investment in Israeli quantum work over the same period.

That pipeline is now politically exposed. European capitals are reviewing research cooperation with Israel in response to the Gaza war. The programme that kept Israeli quantum labs afloat through a decade of relative Western neglect cannot be assumed for the next decade.

The second input is human capital — and here the arithmetic is equally unforgiving. Israel’s quantum physicists are not recruited from the Haredi educational system, which produces almost no graduates in mathematics or physics, nor from the Arab sector, which remains structurally underrepresented in high-tech. They come from the roughly half of the population that receives a core scientific education: non-Haredi Jewish Israelis, disproportionately those who passed through Unit 8200 or the Weizmann and Technion physics faculties. The combined share of Haredim and Arab-Israelis in the working-age population is projected to rise from 30% today to 46% by 2065. Unless educational policy changes, the demographic base from which Israel recruits quantum scientists is projected to shrink from a majority to a minority over the working lives of today’s PhD students. Every Yeshiva subsidy extended and every core-curriculum exemption preserved is, among other things, a decision about the size of the pool from which the next Quantum Machines is founded.

The squeeze, and the minister

This is where Israel’s quantum position collides with the fiscal arithmetic. The 2024 deficit reached 7% of GDP. Debt-to-GDP is drifting toward 77% on unchanged policy. Defence spending has moved from a secular declining trend to a structurally higher plateau. All three major rating agencies downgraded Israel in 2024.

Deep-science funding is the first thing fiscal consolidations cut and the last thing the public notices. The political economy is brutal: the benefits arrive a decade after the finance minister who approved them has left office; the costs are concrete and immediate. Innovation Minister Gila Gamliel, who has repeatedly invoked quantum as one of Israel’s frontier domains, presides over an Innovation Authority whose 2025 report acknowledges that Israeli tech output has stagnated for two consecutive years and that venture fund sizes have fallen more sharply than in the US or Europe. Her ministry’s rhetoric is expansive; her budgetary leverage inside a coalition whose survival depends on Haredi party support is not. The five-year National Quantum Programme lapsed in late 2024. The follow-up committee she appointed in 2025 has yet to produce a successor programme. In the 2025 and 2026 fiscal cycles, quantum is what the ministry talks about in speeches and what the Treasury treats as discretionary.

The argument is not that Israel should become a quantum superpower. It cannot. The argument is that Israel currently occupies a position in the quantum value chain — control systems, software, error correction — that is disproportionate to its size and contingent on inputs that are eroding. This position is worth defending because it is one of the few remaining technological domains in which Israeli indispensability translates directly into both commercial return and intelligence capability. Lose it and Israel becomes a consumer of someone else’s quantum stack, which is to say a country whose signals intelligence service operates on cryptographic infrastructure built, audited, and ultimately trusted to foreign vendors.

Sivan is right that quantum is one of the most important races of this generation. The question the Israeli government has not answered — and on present evidence is not asking — is whether it intends to stay in the race, or whether it will discover in 2035 that the race was lost somewhere in the budget negotiations of 2027. There is no middle position. Quantum is not a field in which a country maintains a small presence while it sorts out other priorities. You are in it seriously or you are a customer.

Willow was a warning disguised as an announcement. What Google demonstrated was not that quantum computing works, but that quantum computing is about to work well enough to matter. For Israel, what that means is specific and unsentimental. The encryption protecting every secret currently travelling through its diplomatic and intelligence infrastructure has a known expiry date. The post-quantum migration that would protect the next generation of secrets is a race Israel is running on an expired national programme whose successor has not been written, funded partly by a European research programme whose political sustainability cannot be assumed, staffed from a demographic base its coalition partners are actively working to shrink, overseen by a minister whose rhetoric exceeds her budgetary authority.

Somewhere in a signals intelligence archive whose location Israel does not know, the cables being sent this week are already being filed away, patient and unread, for the decade they become legible. That decade will arrive whether Israel has ring-fenced its quantum budget or not, whether Haredi boys have learned mathematics or not, whether Horizon Europe has renewed or not. The only variable is whether, when it arrives, Israel is among the countries reading someone else’s cables or among the countries whose cables are being read.

All figures verified against OECD SOCX, OECD Economic Survey of Israel 2025, OECD Revenue Statistics 2025, OECD Health at a Glance 2025, OECD Long-Term Spending Projections (October 2025), Google Quantum AI primary sources, NIST Post-Quantum Cryptography documentation, Quantum Machines Series C press release (25 February 2025), Jerusalem Post (January 2026), Haaretz (November 2025), Times of Israel (July 2025, January 2026), Wikipedia (Willow processor; Iranian nuclear archive), Israel Innovation Authority 2025 Status Report, Israeli Ministry of Health / CBS October 2025 release, Taub Center, and Bank of Israel.

© The Times of Israel (Blogs)