The Entanglement Edge

This report assesses the national security and economic implications of quantum networking, compares U.S. and Chinese strategies and progress, and offers recommendations to sustain U.S. leadership in high-impact applications. It analyzes application areas in secure communications (specifically quantum key distribution, or QKD), distributed quantum computing, and distributed quantum sensing, along with their technical requirements. Its findings underscore that quantum networking is not a single technology but a set of distinct use cases with different value propositions, timelines, and infrastructure needs, demanding a discerning policy approach.

Key Findings

Linking quantum computing modules within data centers is the most pressing and consequential application of quantum networking. Quantum computing companies across hardware modalities identify modular interconnections—links enabling separate processors to function as a single, more powerful system—as essential for scaling to the performance levels needed for high-impact applications from materials discovery to cryptanalysis. Unlike other quantum networking applications, whose value remains more speculative or niche, modular quantum interconnects are critical to realizing the economic and national security potential of quantum computing itself.

Longer-distance quantum networking applications present narrower use cases and harder technical requirements. Scaling quantum computing is more efficiently achieved within a local facility. Entangling sensors may not justify the overhead relative to enhancing individual quantum sensors or their classical networks. Next-generation communications protocols, while improving on early QKD, remain incomplete cybersecurity solutions whose cost relative to classical alternatives likely confines adoption to very narrow scenarios. All three domains also demand high-performing infrastructure—including quantum repeater architectures, exacting timing and synchronization, and extensive fiber or space-based deployments—beyond what data center–scale interconnections require.

QKD is at best a potential niche complement to post-quantum cryptography (PQC), not a replacement for it. The National Security Agency and several allied cybersecurity agencies have concluded that QKD’s practical limitations—including implementation vulnerabilities, distance constraints, costly specialized infrastructure, and its inability to provide authentication—make PQC the primary solution for mitigating the threat of quantum computers capable of breaking current encryption tools. Even China, the world’s strongest QKD proponent, began developing its own PQC standards in 2025, and a prominent government advisory body separately acknowledged that PQC can meet security requirements in most scenarios. No country is pursuing QKD as its sole or even primary approach to secure communications.

China leads in first-generation quantum networking deployment, but that infrastructure does not automatically translate into readiness for higher-impact quantum networks. China operates over 10,000 km of QKD fiber across 80 cities, complemented by satellite-based demonstrations, providing a foundation of infrastructure and technical expertise it can build on as next-generation technology matures. However, next-generation quantum networks for distributed computing and sensing impose far greater technical requirements across enabling hardware, performance, and synchronization, which first-generation QKD infrastructure cannot meet.

The United States holds substantial assets, but its position is not self-sustaining. A growing ecosystem of leading researchers and companies—backed by substantial federal research and development (R&D) support as well as private capital—is making strides toward high-value quantum networking applications in computing, sensing, and communications. The U.S. government has avoided overcommitting to first-generation applications of limited strategic value, instead prioritizing next-generation technologies with high economic and security returns. However, additional steps could help the United States reap greater benefits from these investments.

Key Recommendations

1. Develop standard definitions, performance benchmarks, and assessments of quantum networking applications to enable rigorous evaluation of utility, progress, and capability gaps across applications and to sharpen the objectives and reduce redundancy across federally funded programs.
2. Accelerate quantum interconnects for scalable quantum computing within data centers as the most pressing quantum networking priority, expanding programs like the Defense Advanced Research Projects Agency’s Heterogeneous Architectures for Quantum and complementary efforts at the national labs, the National Science Foundation, the National Institute of Standards and Technology (NIST), and other federal entities to advance critical components including quantum interfaces, memories, and single-photon sources and detectors.
3. Maintain a calibrated R&D portfolio for longer-distance quantum networking, sustaining an effective testbed ecosystem that generates decision-relevant evidence on entanglement-distribution performance, component integration, and comparison against classical alternatives without overcommitting to applications that may not materialize.
4. Secure enabling technologies’ supply chains and infrastructure with spillovers beyond quantum networking, including photonic integrated circuits, precision timing systems, ultralow-loss fiber, and specialized materials where foreign dependencies or other gaps pose cross-cutting risks to quantum, communications, and defense sectors.
5. Accelerate post-quantum cryptography migration at home and coordinate with allies abroad, ensuring timely adoption of NIST PQC standards across government, critical infrastructure, and the private sector while working to prevent divergent allied approaches from creating interoperability risks for shared military and civilian systems.
   

Introduction

Quantum technologies are a critical and intensifying arena of U.S.-China competition, with significant implications for national and economic security. Quantum computers could eventually transform drug discovery, materials science, and cryptanalysis, while quantum sensors are already advancing into early military deployments for high-precision navigation and timing. Across these domains, the United States retains important scientific and industrial advantages, but dominance is not guaranteed and the competitive landscape is evolving rapidly.

Quantum networking—technologies that use the laws of physics to transmit quantum states between nodes—are a less known but potentially consequential dimension of this competition. Unlike classical networks, which move ordinary digital data, quantum networks carry signals that cannot be copied or intercepted without detection and can establish a strong correlation between distant particles—known as entanglement—that has no equivalent in classical physics. If harnessed at scale, quantum networking could accelerate the path to useful quantum computers by linking processors into more powerful systems; enhance the precision of sensor networks critical to navigation, monitoring, and scientific discovery; and potentially secure government and military communications.

In practice, quantum networking remains far from delivering on this potential. Early versions of the technology—referred to in this report as first-generation or “quantum networking 1.0,” most notably quantum key distribution (QKD)—are commercially available but limited in capability. Next-generation or “quantum networking 2.0” architectures would distribute entanglement as a shared resource to support a broader range of applications, including linking quantum computing processors or sensors into more powerful systems and enhancing communications protocols with stronger security guarantees. However, these applications still require major technical advances, and whether they will deliver real-world utility given the difficulty and cost of implementation remains an open question. Distinguishing between these generations of technology, both in their maturity and their potential strategic value, is critical for evaluating the United States’ quantum networking strategy.

China and the United States have taken divergent approaches. China has pursued large-scale QKD deployment and is also investing in entanglement-distribution technologies, positioning itself to compete across both generations of quantum networking. The United States has taken a restrained posture, deprioritizing QKD in favor of next-generation entanglement-distribution research, though with less federal spending than in quantum computing and sensing. U.S. policymakers must decide whether their restraint in pursuing quantum networking is strategically prudent or risks ceding capabilities that could prove critical as quantum technologies mature.

This report seeks to inform that decision. Following an introduction to core quantum networking concepts, it assesses the promise, limitations, and technical foundations of applications in secure communications, distributed quantum computing, and distributed quantum sensing, and examines the enabling components and infrastructure each requires. It then compares U.S. and Chinese strategies, programs, and industrial bases, and concludes with targeted policy recommendations to sustain U.S. leadership in the quantum networking applications most likely to deliver strategic value.