Xanadu Quantum Technologies (XNDU-T) will use a $195-million investment from the federal government to refurbish a Toronto facility in order to build “fault-tolerant, utility-scale, photonic quantum computers.”

In a news release, the company said the funding is from the government's Strategic Response Fund, administered by Innovation, Science and Economic Development Canada (ISED).

“This is part of the largest government investment in quantum manufacturing in Canadian history,” Christian Weedbrook, founder and chief executive officer of Xanadu, said in an email interview with TechNX. “ It reflects a shared belief that Canada has an opportunity to turn its strength in quantum research into domestic companies, intellectual property, manufacturing capabilities and highly skilled jobs.”

The funding is part of a $390-million package that was pledged by the federal government earlier in 2026.

Latest financial filings

In its Q2 financial filing, it reported $1.5 million in revenue, down from $2.8 million in Q1 but higher than the $1.1 million in revenue recorded in Q2 2025.

However, its cash and equivalents as of June 30 reached $312.8 million.

The new funding will enable Xanadu to build quantum technologies that are not easily available today in large quantities, such as “heterogeneous integration of photonic chips, photonic integrated circuit packaging, wafer-level semiconductor testing and measurement, and quantum module assembly,” the firm said.

Specifically, the company plans to use the funding to “help us build infrastructure, hire specialized talent, work with more Canadian universities and companies, and scale the photonic hardware needed to create useful, fault-tolerant quantum computers,” said Weedbrook.

It will also manufacture quantum components for data centres, he said.

The 158,000-square-foot Toronto site will allow it to manufacture, package and assemble quantum computing components. It will include vital cleanrooms that will facilitate the technology, and it is being called Inception, a nod to the 2010 film of the same name.

“The facility will include capabilities for photonic chip packaging, wafer testing and measurement, heterogeneous integration and quantum-system assembly. It will also house our systems integration and operation centre, where quantum modules will be assembled, tested and verified before being installed in server racks,” Weedbrook said.

It was formerly a Campbell’s Soup factory in Etobicoke, according to BetaKit.

Taming supply chain concerns

When up and running, the company hopes to bring products to the market, according to Weedbrook. “As the technology matures, we expect demand to come from organizations seeking computing capabilities beyond what conventional systems can practically deliver.”

It is aiming for a completion date of mid-2027, he said. 

It should also help the firm better address broader issues that have been happening recently in the supply chain. 

“Until now, portions of the chip-making process have had to be completed abroad. Inception will allow us to control nearly the entire process in Canada, making us more resilient to international supply-chain disruptions while keeping critical expertise and intellectual property here,” Weedbrook said.

“The investment keeps the manufacturing, jobs, and intellectual property for a defence-critical technology in Canada, rather than seeing the value scale elsewhere.”

The company is aiming high with its effort, Weedbrook said. “We believe quantum computing has the potential to become a fundamentally new layer of computing infrastructure, enabling organizations to address certain complex problems that are beyond the practical capabilities of today’s conventional computers.”

“Our long-term goal is to build useful, fault-tolerant quantum computers that are available to people and institutions everywhere. Inception is an important step toward producing the quantum modules and infrastructure required for Xanadu’s planned quantum data centre, while establishing Canada as a global centre for advanced photonic quantum manufacturing,” he said.

More applications, Project OPTIMISM on the horizon

Besides computing, the technologies will also help advance technology in the telecommunications, artificial intelligence hardware and sensing technologies fields.

“This is a vital step in our mission to build quantum computers that are useful and available to people everywhere, and we take pride in the Government of Canada’s confidence in Xanadu, and we look forward to continuing our work to realize the full vision for Project OPTIMISM,” Weedbrook said in a press release.

Project OPTIMISM is part of an $893-million effort by Xanadu to expand both research and manufacturing facilities in Canada and is expected to create 275 high-tech jobs, according to ISED.  

About Xanadu

The firm was founded in 2016 and is headquartered in Toronto. It has 300 employees and its investors listed on its website include BDC and OMERS, among other venture capital firms.

The company has already produced a working computer, which it called Aurora. It also offers quantum software, simulators and has an educational codebook that is taught at more than 150 universities around the world.

It is expected that the sector in Canada will contribute $17.7 billion to Canada’s GDP and more than 157,000 jobs by 2045, according to ISED.