What Is Quantum Computing and How Will It Transform the Future?
Yes, believe it or not, quantum computers exist and are changing the path of the future - leading towards rapid innovation and serving to disrupt everyday life.
Quantum computing is rapidly approaching commercial viability. And when it does, it will have an enormous impact on our lives, accelerating advances in emerging technologies, such as EV batteries, biotechnology and artificial intelligence, in ways that are unimaginable today.
Just last month, IBM (IBM) announced that it has built a new quantum computer dubbed Osprey with 433 qubits, which is triple the number of data processing elements compared to last year. The company also announced improvements made to Osprey’s predecessor, Eagle, which extended the lifespan of calculations.
If those last few sentences sounded like a foreign language, you aren’t alone. In this week’s World Reimagined, we are going to look at quantum computing, what it is, how it is evolving, and how to invest in this game-changing technology.
What Is Quantum Computing?
Quantum computers are based on quantum mechanics, a highly complex concept that gave headaches to even the most brilliant minds, such as Albert Einstein, Werner Heisenberg and Erwin Schrödinger (whose cat wasn’t too fond of his research). To appreciate quantum mechanics, we need to first look at classical mechanics, which is basically the physical laws governing the world as we experience it.
Classical mechanics describe things like what happens when you put your foot on the accelerator pedal or why your coffee mug lands on the ground when it rolls off your desk. More importantly, in classical mechanics, an object can only be in one place at a time; your coffee mug is either on the table or on the floor. It cannot be in both places at the same time.
In quantum, which is all about the world of things smaller than an atom (subatomic), stuff gets seriously weird. Subatomic particles are theoretically able to be in two places at the same time, before they are observed, leaving the actual position of the particle to be a probabilistic combination of all its possible positions – back to poor Schrödinger’s cat. This magical ability to be in multiple places at once is referred to as quantum superposition, and I’d argue is likely what makes Santa’s big night possible.
The second key concept in quantum mechanics is entanglement. In a nutshell, if I know something about the probabilistic positioning of one subatomic particle, that tells me something about the probabilistic positioning of another subatomic particle with which the first is entangled. Think of it like two dancers listening to the same music, which represents their entanglement. They are dancing in separate rooms to choreographed routines while the music plays. Without being able to hear the music, if I know which step one is doing, I know which step the other is doing.
How Can Computers Use Quantum Mechanics?
So how is this useful in computing?
Traditional computers are based on bits, which store data either as a “0” or a “1.” A quantum computer instead uses quantum bits called qubits, which are made up of charged particles called ions. These qubits can take on multiple states simultaneously, rather than being limited to just “0” or “1.”
When bits can exist in multiple states at the same time instead of just “0” or “1,” they can perform multiple calculations simultaneously, whereas classical computers can only perform one calculation at a time. Think of this as akin to being able to multitask versus doing one thing at a time. Using superposition and entanglement, quantum computers can perform calculations in ways that are impossible for classical computers. Thinking back to IBM’s recently announced 433-qubit Osprey, consider that a 275-qubit quantum computer can consider more states than there are atoms in the universe.
The History of Quantum Computing
In 1980, physicist Paul Benioff proposed a quantum mechanical model of the Turing machine, which launched the field of quantum computing, and in 1986, Nobel Prizewinner Richard Feynman developed a model for quantum computation, called a quantum circuit; I think we can all take comfort in knowing that the man who won the Nobel prize for his work on quantum electrodynamics also said, “nobody understands quantum mechanics.”
In 1998 Isaac Chuang, Neil Gershenfeld and Mark Kubinec built the first quantum computer capable of performing computations. In the decades since then, significant progress has been made in the field of quantum computing, and quantum computers are now able to perform a wider range of tasks and are on track to upend many disruptive fields of technology.
In October 2019, Google’s Sycamore quantum computer performed calculations more than 3 million times faster than could be done on IBM’s Summit, which is considered the world’s fastest computer. IBM fought back and claims to have reduced the gap and occasionally been able to have beaten Sycamore, but progress continues. In December 2020, a group at the University of Science and Technology of China claimed to have built a quantum computer that implemented a type of Boson sampling on 76 photons. The authors of the report claim that this computer was able to do in 20 seconds what would take a supercomputer 600 million years.
Quantum Computing Today
Progress is still going strong. In October, the Royal Swedish Academy of Sciences awarded the Nobel Prize in physics to three scientists, Alain Aspect, John Clauser and Anton Zeilinger, for their research on quantum information sciences. Recently Google’s Sycamore quantum processor was used by a consortium of researchers from Caltech, Google, Fermilab, MIT and Harvard to generate and control what is equivalent to an Einstein-Rosen bridge, or more commonly referred to as a wormhole, delighting Star Trek fans everywhere.
There are several companies that are currently working on developing quantum computers or aspects of quantum computing, including Amazon (AMZN), AMD (AMD), Baidu (BIDU), IBM, Google, Honeywell (HON), Intel (INTC), Microsoft (MSFT), Quantum Computing (QUBT) and Toshiba (TOSBF), as well as private companies such as D-Wave Systems, Atom Computing, QC Ware and PASQAL. In 2021, IonQ (IONQ) was the first quantum technology start-up in history to go public, becoming the first publicly traded, pure-play quantum computing company. In March 2022, Rigetti Computing (RGTI) went public on Nasdaq, following a merger with Supernova, a special purpose acquisition company (SPAC).
These companies are using a variety of approaches to building quantum computers, including superconducting qubits, trapped ion qubits and photonic qubits. While quantum computers are still in the early stages of development, many believe that they have the potential to revolutionize fields such as medicine, finance and materials science by providing a much faster and more powerful way of solving complex problems.
For example, as the world moves further towards renewable energy, the need for energy storage in the form of batteries increases. To improve batteries, we need to be able to test them, and battery cell simulations can happen a lot faster than real-world testing, accelerating innovation. Their computing power would enable machine learning that could make the kind of artificial intelligence (AI) we see in SciFi movies a reality.
One problem that quantum computing introduces concerns cybersecurity, which is today built mostly on math-based cryptography. Today’s systems work because the math problems providing protection are so complex that classical computers cannot solve them within a useful amount of time. The “Quantum Threat” is that quantum computers will make these security systems obsolete. Some believe that this could become a reality somewhere between 2025 and 2030. Arqit Quantum (ARQQ) looks to address this problem by providing a quantum encryption platform-as-a-service.
Going Mainstream
Quantum is no longer on the fringes. According to The First Annual Report on Enterprise Quantum Computing Adoption from Zapata, quantum has moved to the core of the analytics agenda with quantum naysayers now a minority. Zapata surveyed 300 leaders at large global enterprises with estimated 2021 revenues of over $250 million and estimated computed budgets of over $1 million.
- 74% of respondents agreed that “those who fail to adopt quantum computing solutions will fall behind.”
- 69% of enterprises adopted or were planning to adopt quantum computing in 2022.
- S. respondents were first in quantum adoption, followed by Canada and China.
- 28% of global enterprises on the path to quantum adoption are investing over $1 million in quantum computing.
- For those still unsure that they understand what this is all about, 96% of respondents said they need more than 10 minutes to explain quantum computing to a friend at a party.
In 2021, IDC estimated that the market for quantum computing services could grow to $8.6 billion by 2027, up from $412 million in 2020, representing a compound annual growth rate of over 50%. Boston Consulting Group forecasts the potential value creation from quantum computing to be in the range of $450 billion to $850 billion by around 2040.
How to Invest in Quantum Computing
As investors fled higher-risk assets over the past year, small-cap quantum stocks have taken some hits, making them more attractive these days from a valuation standpoint. Most of the bigger players have also seen their share prices decline, but not as much as the smaller cap players. Aside from the aforementioned companies, investors can also consider the Defiance Quantum ETF (QTUM) launched in September 2018, which seeks to track the total return performance of the BlueStar Quantum Computing and Machine Learning Index. The index tracks the performance of the largest and most liquid companies in the global quantum computing and machine learning industries.
The Bottom Line
The massive leap in processing capabilities that comes with quantum computing will make possible a world that today is the stuff of science fiction. It will bring the ability to process enormous amounts of data incredibly fast, a total game-changer in machine learning and will allow simulations that are unimaginable today. It will make possible an entirely new level of AI that could accelerate advances in genomics, disease management and renewable energy technologies – just to name a few – helping us live longer, healthier lives in a world in which the cost of energy is rapidly falling towards zero, and that is a world reimagined.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Lenore Elle Hawkins
Lenore Elle Hawkins has, for over a decade, served as a founding partner of Calit Advisors, a boutique advisory firm specializing in mergers and acquisitions, private capital raise, and corporate finance with offices in Italy, Ireland, and California. She has previously served as the Chief Macro Strategist for Tematica Research, which primarily develops indices for Exchange Traded Products, co-authored the book Cocktail Investing, and is a regular guest on a variety of national and international investing-oriented television programs. She holds a degree in Mathematics and Economics from Claremont McKenna College, an MBA in Finance from the Anderson School at UCLA and is a member of the Mont Pelerin Society.
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