Quantum Technologies in Defence: Strategic Trends and Opportunities

Recent official strategies and programs across NATO, the EU, and allied nations demonstrate a surging focus on quantum technologies as critical enablers of future defence capabilities. NATO’s first-ever Quantum Technologies Strategy (Jan 2024) warns that quantum breakthroughs could “revolutionise sensing; imaging; precise positioning, navigation and timing; communications; computing; modelling; simulation; and information science”, with “far-reaching implications for […] security and defence”. These technologies are dual-edged: they promise unparalleled military advantages but also pose risks if adversaries gain quantum superiority. Allied governments are therefore racing to build a “quantum-ready” ecosystem – one that can harness quantum for military use while protecting against quantum-driven threats.

Key defence-relevant quantum domains include quantum sensing and imaging, quantum navigation and timing, quantum radar, and quantum encryption/communication. This report analyzes each domain’s technological and strategic trends (2023–2025), maps value-chain segments poised for growth, profiles notable companies (startups, spin-offs, mid-caps and primes) active in defence-oriented quantum efforts (especially those in NATO/EU programs), highlights government-funded projects/pilots, and discusses investment implications for venture, private equity and institutional investors. The analysis draws exclusively on official documents and programs from NATO, the European Commission (DG DEFIS, EDA, EIC, EDF), NATO’s DIANA accelerator and Innovation Fund, and allied nations including the UK, Norway, Japan, South Korea, and Australia. Strategic drivers: Military interest in quantum tech is propelled by its potential to offset vulnerabilities in existing systems.

For example, quantum sensors promise navigation and timing independent of GPS (mitigating jamming/spoofing), while quantum communications could ensure secure command and control even against next-gen cyber threats. Quantum computing, conversely, threatens today’s encryption but also offers new computational power for optimization and code-breaking.