Generalist · Corporate VC

M12, Microsoft's Venture Fund

Holds a single quantum position, PsiQuantum (photonics), backed in 2020-2021 and not topped up since; Microsoft's quantum conviction now runs through its own Majorana topological program and direct corporate deals (Photonic, 2023), not M12.

Active San Francisco, United StatesFounded 2016

Investment thesis

Microsoft's corporate venture fund (evergreen, Microsoft sole LP), 260+ companies backed since 2016 including 15 unicorns and 6 IPOs; current focus areas are AI Apps, Security for AI, AI Cloud Infrastructure, AI Data Ops & Models, and Deep Tech & Systems.

Its single quantum bet is PsiQuantum (Series C 2020, Series D 2021), now valued at $7B post its $1B Series E (Sept 2025) without M12: the position has compounded sharply, validated by AUD $940M (~USD $620M) from the Australian and Queensland governments for a Brisbane utility-scale system and the Omega chipset manufactured with GlobalFoundries (Feb 2025, Nature paper).

Microsoft Corp pursues quantum on two separate tracks outside M12: its own topological program (Majorana 1, Feb 2025; Majorana 2 at Build 2026, with ~1,000x more reliable qubits and a 2029 commercial-scale target) and direct strategic investments such as Photonic Inc ($100M, Nov 2023, with BCI).

Azure Quantum's cloud distributes third-party hardware from IonQ, Quantinuum, Rigetti and Pasqal; PsiQuantum is not on the platform, so the M12 position is a pure equity bet on fault-tolerant photonics, not a channel play.

Anti-thesis

The patterns that trigger a fast no with this fund.

  1. No new quantum check since July 2021: the fund's focus areas have pivoted hard to AI, and quantum has no dedicated thesis or partner mandate today
  2. Microsoft Corp invests in quantum directly when it matters strategically (Photonic, $100M, 2023), so a startup seeking 'Microsoft money' may be routed to corporate, where the deal is partnership-gated, not venture-gated
  3. Majorana 2 (June 2026) signals Microsoft's primary bet is its own topological hardware; external modalities competing with that roadmap face an implicit conflict
  4. Backing from M12 means accepting CVC dynamics: strategic alignment reviews, no fund-cycle pressure to deploy, and a pass on PsiQuantum's own Series E shows they will not automatically defend positions

Notable quantum portfolio

Full portfolio
PsiQuantum

Frequent co-investors