Quantum computing: Believe the hype
Quantum computing is now entering the commercial sphere, and given its potential impact on everything from climate change to medical research, no business can afford to ignore it.
Investor Monitor article | By Lara Williams
Speculation around emerging technologies can be somewhat mystifying for business leaders trying to stay innovative. Bold claims that quantum computing will usurp classical computing and render today’s encryption methods obsolete in a matter of years are a case in point.
In September 2020, management consultancy Boston Consulting Group released a report predicting quantum computers would improve the operating incomes of their users by between $450bn and $850bn a year by 2050. Whether the goal is to stay ahead of the innovation curve or simply a fear of being left behind, businesses cannot ignore such claims, particularly now that quantum computing is believed to be entering the commercial sphere.
What is quantum computing?
Quantum computing involves data processing using special quantum states. This kind of processing is fundamentally different to the way conventional computers work, as it enables quantum computers to handle myriad variables and potential outcomes that can be used to solve optimisation or simulation problems at speeds and volumes outside the realm of classical computing.
Paris based think-tank Le Lab Quantique conducted a comprehensive study of quantum computing patents filed to date. The study identified 15,245 patents dating back to the 1950s, of which 13,208 were post–2000. The 100 patents per year mark was passed in 1992, but it wasn’t until 2012 and onwards that accelerated growth occurred. In 2009, 382 patents were filed, with the figure reaching 1,799 in 2018, representing a compound annual growth (CAGR) rate of 18.8%. Between 2015 and 2018, the CAGR reached 27.15%, indicating an inflection point in the technology’s maturation.
However, while investment in quantum computing is becoming a national priority in many countries, policymakers and business leaders must beware the inflated expectations of “quantum magical thinking”, according to GlobalData analyst Steven Schuchart.
Quantum computing may have reached boardroom-level discussion, but commercial applications do not yet exist. Currently, use cases are speculative with a handful of established companies including IBM, Intel, Microsoft and Google exploring use cases under test conditions. Venture capital-backed start-ups including Rigetti, D-Wave, PsiQuantum and ColdQuanta are looking at both hardware and software solutions using a variety of different approaches.
Professor Andrew Daley at the University of Strathclyde says that while the wide-scale impact of quantum computing will probably not be felt for another 10–20 years, there are some computational problems that could be solved within the next five years. “If someone tells you they are going to completely revolutionise their business with quantum computing in the next six months, you should take that with a pinch of salt,” he says.
However, partnerships between academia and businesses working to develop both quantum hardware and software solutions could produce very interesting results in five to ten years – and Daley is truly excited about the long-term possibilities.
What will quantum computing mean for businesses?
For multinational companies, quantum computing should be seen as a “force multiplier”, according to Schuchart. “Quantum supremacy is the idea that a quantum computer can complete tasks too large for a standard computer,” he says.
The cost of a quantum computer could range anywhere from $10m to $15m, with annual maintenance costs upwards of $1m. Some organisations working with classified data, such as government agencies, may decide on purchasing on-premises hardware. However, Schuchart imagines quantum computing will be most efficiently used within a business environment as an outsourced service for problems that conventional computing cannot solve.
Quantum computing’s global centre of gravity
One measure of the sector’s emergent global centre of gravity is the number of patents filed. Le Lab Quantique’s 2020 Quantum Computing Patents and Investment study ranked the world’s top 20 organisations according to number of patents filed.
The report found the US leading in technologies related to the construction of quantum computers, with five US multinationals present in the ranking (IBM, Intel, Google, ThermoFischer Scientific and MicroMass).
Although China had 11 organisations in the top 20, and was the only country in which universities feature, a state-driven incentive system for the number of patents filed makes this result less meaningful. This is demonstrated by an explosion in the number of Chinese patents across all sectors, with China filing the highest numbers of patents globally in 2019, according to the World Intellectual Property Organisation
Schuchart believes a definitive global hub for quantum computing has yet to emerge. At its basic level, quantum computing involves physics and mathematical research, so any activity in the field would likely be associated with or at least be in the proximity of a university.
Does the UK’s quantum ecosystem give it a global edge?
Julian Taylor leads international business engagement at the University of Strathclyde. He says the UK’s key strength lies in the joined-up nature of its national programme, led by the Department for Business, Energy and Industrial Strategy and UK Research and Innovation, with the new National Quantum Computing Centre as its focal point. As a cluster of excellence, Scottish universities also form part of the national hub for quantum computing and simulation led by Oxford University.
The combined strength of these stakeholders is particularly powerful, according to Taylor, an expert on stewarding academic excellence towards a commercial proposition. “In partnership with the Universities of Strathclyde, Glasgow and Edinburgh, and the Scottish Government, we are taking academic-level research and presenting it in a way that shows Scotland as an attractive location for global companies wrestling with quantum computing challenges,” he says.
For example, cybersecurity defences within the financial services sector will be fundamentally changed with the advent of functioning quantum computing. “Whether the impact is five or ten years off, companies across all sectors need to undertake research now to better understand the implications of its future application,” says Taylor.
UK start-up Riverlane is a Cambridge University spin-out that has recently closed a major fundraising round of $20m from investors including Arm co-founder Hermann Hauser’s Amadeus Capital, venture capital firm Draper Esprit and the University of Cambridge itself.
Founder Steve Brierley says the UK’s unique quantum ecosystem has been integral to the company’s development of its quantum computing operating system Deltaflow.
From a software perspective it is a unique environment with eight quantum hardware companies representing 20% of the world’s hardware manufacturers right here within a three-hour journey
With a framework of public sector support and the National Physics Laboratory working towards a set of common standards, Brierley is optimistic about the UK emerging as a leader in quantum computing. “There is a lot of engineering to be done before the really high-impact applications, and I think we are in this fantastic environment where there are big challenges for a lot of smart people to work together on solving – and it is all achievable,” he says.
Why quantum is the future
Silicon Valley-based PsiQuantum plans to roll out the world’s first “useful” quantum computer “within a handful of years”, according to co-founder Jeremy O’Brien. The start-up’s unique method of using photons that run along waveguides etched onto ordinary silicon chips has garnered global attention among some high-profile supporters including Arm’s Hauser.
The company was founded in 2015 by researchers from Imperial College and the University of Bristol, before relocating to Silicon Valley. With an impressive $215m of funding from frontier venture capitalists including Atomico and Playground Global, renowned investors such as Blackrock and Baillie Gifford, and strategic partners like Microsoft’s M12 Ventures, PsiQuantum is collaborating with multinationals across the aerospace, automotive, pharmaceutical and finance sectors on possible use cases.
Locating in Silicon Valley gave the start-up good access to venture capital, but the move was also integral to developing the right skills base. “About three-quarters of our workforce are semiconductor engineers and so Silicon Valley is really the place to recruit,” says O’Brien. The margin of savings to be gained from operating elsewhere was too small. “It is not as if we are running a 10,000-person software development team that we could put in a cheaper location for quarter of the price,” adds O’Brien.
With technology development progressing more rapidly and global expansion for the company on the horizon, it is an exciting time, not only for PsiQuantum but for quantum computing as a whole. Among those closest to the technology, the anticipation is palpable. O’Brien sees the potential applications of quantum computing as somewhat deserving of the hype, for the profound effect they will have on global challenges such as climate change and medical research. “One day we will look back on our pre-quantum computing world and wonder how on earth we survived without it, never mind sustain a population of ten billion people,” he says.