The idea of a tech hub emerging in the Midwest once seemed unlikely. For decades, Silicon Valley was synonymous with the “epicenter of innovation.” But AOL founder Steve Case’s prediction of a Midwest resurgence nearly a decade ago is starting to take shape. Through tax incentives, major investments, and a growing quantum ecosystem, Illinois is positioning itself as a quantum computing hub, as evidenced by the state’s recent developments.
Midwest tech hub takes shape
In 2014, AOL co-founder Steve Case launched his “Rise of the Rest” bus tour with a vision to shift the leadership of tech innovation from the coasts to America’s heartland. His prediction was based on factors such as falling costs, increasing investment, and untapped potential in Midwestern cities. Although there was some skepticism at first, Case’s efforts have led to measurable progress, as he states in an interview with WIRED:
Illinois is emerging as a key player in this trend. Once known primarily for its industrial base, Chicago has now established itself as a global hub for quantum technologies. The state’s efforts to become a leader in this field are supported by government initiatives and collaborations with private companies, signaling the potential for significant tech growth in the Midwest.
Quantum as Illinois’ Bold Bet
A major driver of Illinois’ emergence as a technology hub is Governor JB Pritzker’s $500 million investment in quantum technologies, which is a centerpiece of the state’s fiscal year 2025 budget. The effort includes the development of the Illinois Quantum Microelectronics Park (IQMP) on Chicago’s southeast side, which will be the primary home of the first practical-scale quantum computer developed by PsiQuantum.
The decision to focus on quantum computing aligns with the state’s broader goal of driving economic growth through emerging technologies. Pritzker emphasized that the investment will help Illinois take the lead in coveted industries such as quantum computing, artificial intelligence and semiconductors. The state’s existing infrastructure, such as the Chicago Quantum Exchange, has already attracted significant investment from the federal government and businesses.
Tax incentives as investment in Illinois tech hub development
According to the Chicago Tribune, Illinois’ strategy to attract companies like PsiQuantum relies heavily on tax incentives, specifically the MICRO Act, which provides long-term tax breaks and other financial incentives to companies working in quantum research and development. These incentives reduce quantum companies’ asset valuations by 15 percentage points over 30 years, significantly reducing their tax liability and making Illinois a more attractive location for the high-tech industry.
While supporters, such as Cook County Council Speaker Toni Preckwinkle, argue that these incentives will lead to long-term economic benefits like job creation and increased investment, critics worry about the direct impact on local residents. The Chicago Tribune points out that many Cook County homeowners are already struggling with rising property taxes, raising questions about whether these incentives will truly benefit the community as a whole.
The tax incentives are part of a broader strategy aimed at establishing Illinois as a leader in the quantum, semiconductor and microelectronics industries. The approach mirrors successful models in other regions, such as Colorado and the Mountain West, which have used similar tax incentives and federal funding to build vibrant tech ecosystems. The goal is to build a self-sustaining ecosystem in Illinois that can drive innovation and growth over the long term through partnerships between government, academia and private companies, aligning with the vision of Steve Case’s “Rise of the Rest” initiative.
Chicago’s emergence as a quantum hub
Illinois’ quantum initiative goes beyond attracting individual companies. The state’s Chicago Quantum Exchange serves as a hub for collaboration between universities, national laboratories and corporate partners. Based at the University of Chicago, CQE has been instrumental in securing more than $1 billion in investments, furthering Illinois’ efforts to become a leader in quantum research and development.
The Chicago Quantum Exchange is fostering a vibrant quantum ecosystem by connecting institutions like the University of Illinois and Fermi National Accelerator Laboratory with private companies, positioning Illinois as a leader in the field that aligns with the state’s broader goal of becoming a national hub for quantum computing.
Realizing our vision
As Illinois continues to attract leading quantum companies like PsiQuantum, it is poised for long-term success. The state’s efforts to build a quantum ecosystem, backed by tax incentives and significant investment, show that Illinois is serious about becoming a leader in the field. It remains to be seen whether the state will be able to fully capitalize on the opportunity, but the groundwork is being laid for a quantum future that could transform the economic landscape of the Midwest. Steve Case has added a new title to his already impressive resume: Oracle.
