Microsoft says U.S. can’t afford falling behind China in quantum computers
Microsoft President Brad Smith speaks during signing ceremony of cooperation agreement between the Polish Ministry of Defence and Microsoft, in Warsaw, Poland, February 17, 2025.
Kacper Pempel | Reuters
The U.S. cannot afford to fall behind China in the race to a working quantum computer, Microsoft President Brad Smith wrote Monday.
President Donald Trump and the U.S. government need to prioritize funding for quantum research, or China could surpass the U.S., endangering economic competitiveness and security, Smith wrote.
“While most believe that the United States still holds the lead position, we cannot afford to rule out the possibility of a strategic surprise or that China may already be at parity with the United States,” Smith wrote. “Simply put, the United States cannot afford to fall behind, or worse, lose the race entirely.”
Microsoft’s position is the latest sign that research into quantum computing is starting to heat up among big tech companies and investors who are looking for the next technology that could rival the artificial intelligence boom.
Smith is calling for the Trump administration to increase funding for quantum research, renew the National Quantum Initiative Act and expand a program for testing quantum computers by the Defense Advanced Research Projects Agency, or DARPA. The Microsoft executive is also calling on the White House to expand the educational pipeline of people who have the math and science skills to work on quantum machines, fast-track immigration for Ph.D.s with quantum skills and for the government to buy more quantum-related computer parts to build a U.S. supply chain.
Microsoft did not detail how China surpassing the U.S. in quantum computing technology would endanger national security, but a National Security Agency official last year discussed what could happen if China or another adversary surprised the U.S. by building a quantum computer first.
The official, NSA Director of Research Gil Herrera, said that if such a “black swan” event happened, banks might not be able to keep transactions private because a quantum computer could crack their encryption, according to the Washington Times. A working quantum computer could also crack existing encrypted data that is usually shared publicly in a scrambled fashion, which could reveal secrets on U.S. nuclear weapon systems.
In February, Microsoft announced its latest quantum chip called Majorana, claiming that it invented a new kind of matter to develop the prototype device. Last year, Google announced Willow, a new device the company claimed was a “milestone” because it was able to correct errors and solve a math problem in five minutes that would have taken longer than the age of the universe on a traditional computer.
While the computers people are used to use bits that are either 0 or 1 to do calculations, quantum computers use “qubits,” which end up being on or off based on probability. Experts say that quantum computers will eventually be useful for problems with nearly infinite possibilities, such as simulating chemistry, or routing deliveries.
But the current quantum computers are far away from that point, and many computer industry participants say it could take decades for quantum computers to reach their potential.
Microsoft’s chip, Majorana, has eight qubits, but the company says it has a goal of least 1 million qubits for a commercially useful chip. Microsoft needs to build a device with a few hundred qubits before the company starts looking at whether it’s reliable enough for customers.
WATCH: How quantum computing could supercharge Google’s AI ambitions
Oracle CEO Clay Magouyrk appears on a media tour of the Stargate AI data center in Abilene, Texas, on Sept. 23, 2025.
Kyle Grillot | Bloomberg | Getty Images
Oracle on Friday pushed back against a report that said the company will complete data centers for OpenAI, one of its major customers, in 2028, rather than 2027.
The delay is due to a shortage of labor and materials, according to the Friday report from Bloomberg, which cited unnamed people. Oracle shares fell to a session low of $185.98, down 6.5% from Thursday’s close.
“Site selection and delivery timelines were established in close coordination with OpenAI following execution of the agreement and were jointly agreed,” an Oracle spokesperson said in an email to CNBC. “There have been no delays to any sites required to meet our contractual commitments, and all milestones remain on track.”
The Oracle spokesperson did not specify a timeline for turning on cloud computing infrastructure for OpenAI. In September, OpenAI said it had a partnership with Oracle worth more than $300 billion over the next five years.
“We have a good relationship with OpenAI,” Clay Magouyrk, one of Oracle’s two newly appointed CEOs, said at an October analyst meeting.
Doing business with OpenAI is relatively new to 48-year-old Oracle. Historically, Oracle grew through sales of its database software and business applications. Its cloud infrastructure business now contributes over one-fourth of revenue, although Oracle remains a smaller hyperscaler than Amazon, Microsoft and Google.
OpenAI has also made commitments to other companies as it looks to meet expected capacity needs.
In September, Nvidia said it had signed a letter of intent with OpenAI to deploy at least 10 gigawatts of Nvidia equipment for the San Francisco artificial intelligence startup. The first phase of that project is expected in the second half of 2026.
Nvidia and OpenAI said in a September statement that they “look forward to finalizing the details of this new phase of strategic partnership in the coming weeks.”
But no announcement has come yet.
In a November filing, Nvidia said “there is no assurance that we will enter into definitive agreements with respect to the OpenAI opportunity.”
OpenAI has historically relied on Nvidia graphics processing units to operate ChatGPT and other products, and now it’s also looking at designing custom chips in a collaboration with Broadcom.
On Thursday, Broadcom CEO Hock Tan laid out a timeline for the OpenAI work, which was announced in October. Broadcom and OpenAI said they had signed a term sheet.
“It’s more like 2027, 2028, 2029, 10 gigawatts, that was the OpenAI discussion,” Tan said on Broadcom’s earnings call. “And that’s, I call it, an agreement, an alignment of where we’re headed with respect to a very respected and valued customer, OpenAI. But we do not expect much in 2026.”
OpenAI declined to comment.
WATCH: Oracle says there have been ‘no delays’ in OpenAI arrangement after stock slide
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