Geopolitics, Threat, And The Quantum Revolution: Why Tensions Could Speed up, Not Derail, The Subsequent Wave Of Innovation

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by Tal Elyashiv, Founder & Managing Accomplice of SPiCE VC and writer, “Investing in Revolutions: Creating Wealth from Transformational Expertise Waves“

The world right this moment is on edge. From U.S.–China competitors and Center East volatility to rising requires fiscal austerity, the geopolitical panorama is extra fractured than at any level within the final three many years. Understandably, buyers are nervous. Markets are risky. Non-public fairness companies are sitting on a trillion {dollars} in dry powder. Enterprise capital deal counts are down by 25% in Q1 2025 (excluding megadeals like OpenAI). And even institutional buyers are trimming publicity to rising tech.

However right here’s the paradox: Whereas these forces might gradual funding in sure areas, they typically act as accelerants — not inhibitors — for transformational know-how adoption. That’s the historic sample throughout each main technological revolution we’ve seen. And we’re seeing it once more with what I name the Quantum Revolution — the convergence of blockchain, AI, quantum computing, robotics, and autonomous methods.

As I write in “Investing in Revolutions“, “Geopolitical flashpoints, removed from halting innovation, have persistently served as focusing mechanisms. They expose inefficiencies, floor nationwide vulnerabilities, and catalyze strategic investments in capabilities that have been beforehand optionally available.”

This second is not any totally different.

The Previous Is Prologue Every earlier revolution — steam and mechanization, electrification, mass manufacturing, and the digital period— was born, matured, or accelerated beneath geopolitical stress. The Napoleonic Wars supercharged British industrial dominance. The Chilly Warfare’s arms race pushed the U.S. to spend money on DARPA, semiconductors, and house infrastructure. The web itself traces its lineage to ARPANET, a protection initiative born of army nervousness.

This isn’t unintentional. As nations confront threats to their sovereignty or financial benefit, they make investments — urgently and at scale — in applied sciences that may create uneven benefit.

Contemplate AI. Within the wake of Russia’s invasion of Ukraine, and China’s rising assertiveness round Taiwan and semiconductors, Western democracies have ramped up funding in AI-driven protection applied sciences — drone swarms, battlefield intelligence platforms, and quantum-secure communications. NATO itself has launched a €1 billion innovation fund targeted on rising tech. In the meantime, the U.S. CHIPS and Science Act earmarks $52.7 billion for semiconductor manufacturing and analysis — a direct response to perceived overdependence on East Asia.

Because the historian Margaret O’Mara wrote in “The Code“, “Silicon Valley didn’t simply emerge from garages and enterprise capital — it grew out of federal spending, protection contracts, and chilly warfare urgency.” That sample is repeating.

Traders Are Pausing — However Not the Entire Market Nonetheless, current occasions have sparked actual hesitation. Household places of work and institutional LPs have gotten extra cautious. A current BlackRock survey discovered that 84% of household places of work cite geopolitical uncertainty as their prime allocation concern, with almost half growing money and alternate options.

In personal fairness, almost three-quarters of basic companions say world tensions and tariffs are delaying their deployment plans, in line with a PwC report. In enterprise capital, funding is down — notably in sectors like blockchain and shopper tech. Enterprise Insider lately reported that “hopes of a 2025 VC rebound have dimmed,” due partly to exit bottlenecks and macro instability.

However that doesn’t imply innovation is halting. It’s shifting. Capital is flowing to protection tech, cybersecurity, AI infrastructure, and quantum R&D. Even amongst cautious buyers, 33% say they’re planning to extend danger publicity by the tip of 2025 (PGIM). The lesson? Capital is rebalancing, not retreating.

The Subsequent-Gen Arms Race Is Already Underway What’s rising now could be a bifurcated world tech stack. On one aspect, the U.S., Europe, and allies are consolidating requirements round trusted chips, cloud infrastructure, and AI security. On the opposite, China and aligned economies are pushing for sovereign management over their digital, monetary, and quantum infrastructure. As I observe within the guide, “the web is not one community — it’s many, every embedded with values, controls, and dependencies of the governments behind them.”

The implications are huge. Quantum computing threatens to render right this moment’s encryption out of date, forcing governments and companies to arrange for a post-quantum safety panorama. In the meantime, blockchain is changing into a geopolitical device: Russia and Iran are actively exploring crypto rails and decentralized ledgers to bypass Western monetary sanctions and SWIFT restrictions, whereas the BRICS nations (Brazil, Russia, India, China, South Africa) have introduced collective plans for cross-border CBDCs and blockchain-based fee methods to cut back reliance on the U.S. greenback. Generative AI is already reworking army intelligence operations, from real-time drone swarm coordination to stylish disinformation campaigns. On the similar time, robotics and autonomous methods are more and more being deployed to insulate provide chains from labor disruptions and geopolitical chokepoints — illustrated by China’s push for good factories and the U.S. Division of Protection’s ramp-up of autonomous automobile contracts.

This geopolitical rivalry isn’t a aspect observe — it’s the central power shaping how and the place the Quantum Revolution unfolds.

Authorities Spending: Accelerator or Brake? There’s one looming danger that would gradual this momentum: home political paralysis. Within the U.S., proposed federal spending cuts, together with reductions in R&D and grants to nationwide science businesses, might threaten America’s management. Whereas protection spending might stay intact, broader scientific innovation — from foundational AI analysis to quantum cryptography — requires sustained public-private collaboration.

A Brookings Establishment report warns that “declining federal R&D funding as a share of GDP dangers ceding innovation management to opponents.” In the meantime, China has introduced plans to spend almost $1.4 trillion over the following 5 years on AI, semiconductors, and good manufacturing.

In a world the place technological management defines geopolitical energy, retreating from public funding can be a strategic error.

So What Ought to Traders Do? First, bear in mind this: revolutions are lengthy video games. Brief-term volatility shouldn’t obscure long-term worth creation. As I wrote in “Investing in Revolutions“, “Revolutions occur steadily, then instantly. The secret's to be positioned earlier than the inflection level — not after.”

This isn't the time to desert rising tech. It’s the time to refine your thesis. Be discerning. Deal with areas the place geopolitical urgency aligns with funding tailwinds: AI-driven protection methods, encrypted quantum networks, good manufacturing unit automation, and decentralized monetary infrastructure.

It’s additionally vital to comply with the lead of main gamers. Microsoft, Alphabet, Meta, and Nvidia are investing aggressively in foundational fashions, customized chips, and world cloud infrastructure. Amazon is integrating robotics and generative AI into its logistics networks. These aren’t bets — they’re blueprints.

And whereas blockchain ventures could also be dealing with non permanent headwinds in broader enterprise circles, tokenization of real-world property (RWAs) is quietly gaining highly effective traction — particularly amongst institutional finance leaders. BlackRock’s entry into tokenized funds is a transparent sign: blockchain infrastructure is maturing, and the use circumstances are evolving from speculative to structural.

At SPiCE VC, we’ve lengthy held the conviction that blockchain’s most sturdy influence lies not in hype cycles, however in its energy to rewire how monetary property are issued, traded, and settled. That thesis has been validated again and again. As the primary absolutely tokenized VC fund, SPiCE VC has now executed its third investor payout, with a DPI exceeding 2.1x and TVPI over 6.3x — outperforming even top-decile VC benchmarks. These outcomes underscore a broader reality: whereas the noise might shift, the sign — the underlying worth of transformative know-how — stays sturdy.

This institutional shift towards tokenization shouldn't be a detour from the revolution. It’s one in all its most vital milestones.

Ultimate Ideas: Historical past Rhymes Geopolitical stress assessments know-how. It reveals the strategic worth of capabilities that after appeared area of interest. Within the Forties, radar and codebreaking reshaped World Warfare II. Within the Eighties, the house race fueled breakthroughs in computing. Right now, it’s drone AI, quantum encryption, and decentralized finance which will outline the contours of energy.

The Quantum Revolution isn’t slowing — it’s being formed. Traders who perceive the deeper currents — not simply the headlines — shall be finest positioned to seize its upside.

As I conclude within the guide: “You don’t must predict the revolution. You'll want to perceive the sample. When you do, you’ll see that even in moments of chaos, the trajectory of transformation not often bends backward.”

Tal Elyashiv is founder and managing accomplice of SPiCE VC, the best-performing blockchain enterprise capital fund. He distills many years of enterprise capital funding and tech entrepreneurial expertise into actionable insights. In his new guide, “Investing in Revolutions“, Elyashiv makes use of vivid examples and sensible frameworks to disclose not simply how these transformations unfold, however methods to determine and revenue from them.