Xanadu Quantum Technologies has entered into negotiations with the government of Canada and the province of Ontario for funding to support its proposed semiconductor and photonics manufacturing efforts, dubbed Project Optimism.

The photonic quantum computing company is seeking up to CA$390 million ($286m) in combined government support, arguing that the project would help position both Canada and Ontario as leaders in advanced photonics, semiconductor innovation, and quantum manufacturing.

According to Xanadu, Project Optimism would establish new domestic capabilities for heterogeneous integration, photonic integrated circuit packaging, wafer-level semiconductor test and measurement, and quantum module assembly. This would help address emerging supply chain gaps, the company said, whilst simultaneously supporting the development of expertise that could advance telecommunications, AI hardware, sensing, and other chip-driven technologies.

“Project Optimism reflects a bold vision for building the advanced manufacturing capabilities required to support the next generation of quantum technologies,” said Christian Weedbrook, founder and CEO of Xanadu. “We believe this investment, upon finalization, will unlock a major milestone for Xanadu and for Canada’s quantum ambitions. With the proceeds expected from our pending transaction alongside the government’s support, we will be well-positioned to fund the infrastructure required for large-scale quantum computing.

“We are grateful for the opportunity to explore working with the Government of Canada and the Government of Ontario as we continue discussions toward advancing this initiative and strengthening Canada’s leadership in quantum innovation.”

Founded in 2016, in January 2023, Xanadu raised CA$40 million ($27m) from the Canadian government’s Strategic Innovation Fund to build and commercialize photonic-based, fault-tolerant quantum computers. In February 2025, the company announced it had built a prototype of the world’s first universal photonic quantum computer.

In November of last year, Xanadu announced plans to go public via a special purpose acquisition company (SPAC) merger that will see the company valued at $3.1 billion. Under the terms of the deal, quantum computing firm Xanadu will merge with Crane Harbor Acquisition Corp., a publicly traded SPAC, to form a new entity.