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Breaking Down the Quantum Business
Per Gartner data, 20% of global organizations, including governments and companies, are expected to budget for quantum-computing projects by 2023, up from less than 1% in 2018.
A 2020 paper by Inside Quantum Technology (IQT) projects that the quantum computing market will reach $2.2 Billion by 2026 as the number of installed quantum computers will reach around 180 over that same period.
Since personal quantum computers are still very far off, companies allow clients, researchers, and other users to access their quantum processors via the cloud. As IQT writes, Cloud access revenues will likely dominate as a revenue source for quantum computing companies, accounting for 75% of all quantum computing revenues in 2026.
A simple description of quantum computing, via MIT Technology Review, states that a classical computer utilizes bits that carry information represent either a 1 or a 0 (this is known as binary); but quantum bits, or qubits—which take the form of subatomic particles such as photons and electrons—can be in a kind of combination of 1 and 0 at the same time, a state known as “superposition.” Unlike bits, qubits can also influence one another through a phenomenon known as “entanglement.”
Using these two principles, qubits can exist in numerous different states and act as more sophisticated switches, enabling quantum computers to function in ways that allow them to solve difficult problems that are intractable using today’s computers. Quantum computing also has the potential to rapidly scale up its power, bypassing constraints that slowed the growth of traditional computers like Moore’s Law, which saw computing power double every 18 months to 24 months or so.
IBM and Google Scale up, Find Quantum Partners in Energy and Pharma
As revealed at The Wall Street Journal’s virtual CIO Network summit, IBM plans to release new quantum systems this year and next, but the most significant shift will come with the launch of their 1121-qubit Condor machine in 2023. To put that number in context, it was only 5 years ago that IBM was rolling out a 5-qubit quantum prototype.
Within the next couple of years, IBM’s quantum technology will allow engineers to mitigate errors through software – known as quantum error correction (QEC) – as opposed to only through hardware for the first time. Over that same time frame, CEO Arvind Krishna believes the company’s hybrid cloud will bring quantum computing to the company’s clients and begin generating revenue.
By 2025, IBM plans for “frictionless quantum computing” to be a reality. Quantum computers will be able to speed up research-and-development discoveries because the machines will excel at modeling physics, chemistry and materials science.
Recently, IBM has been working with ExxonMobil to find more efficient ways to manage the tens of thousands of merchant ships crossing the oceans to deliver the goods that we use every day. In mathematical terms, ZDnet notes that this means finding the right quantum algorithms and variables – such as the routes traveled, the potential movements between port locations and the order in which each location is visited on a particular route – that could be used to most effectively model the industry’s routing problems, on current or near-term devices. Those equations can be found in the open access paper, Formulating and Solving Routing Problems on Quantum Computers.
Alphabet’s Google is also knee deep in quantum computing. In 2019, MRP broke down the facts and fiction behind their claim of having reached “quantum supremacy”; the point at which a quantum computer that can perform a task beyond the reach of even the most powerful conventional supercomputer in any practical time frame.
While there is no denying that Google’s 56-qubit quantum machine did solve an extremely complex calculation in just 3 minutes and 20 seconds, 158 million times faster than the estimated 10,000 years it would have taken the world’s strongest supercomputer to do the same, it was still more of a laboratory experiment than something that would be applied in the real world.
Still, progress is progress, and proving quantum algorithms can surpass traditional binary machines is the name of the game for now. Google continues to make strides in that pursuit, recently partnering with D-Wave, one of the first companies to develop commercial applications for quantum computers, for a project that successfully modeled the behavior of a spinning two-dimensional “quantum magnet”. The partners demonstrated a clear quantum advantage by increasing both “simulation size and problem hardness to over 3 million times that of corresponding classical methods”.
In January, the world’s largest private drug company, Boehringer Ingelheim, announced it would partner with Google to use quantum computing in pharmaceutical R&D. The idea behind this collaboration is that quantum computing will soon be able to speed drug development by simulating molecules and chemical reactions much faster than conventional high-performance computers (HPCs).
As IEEE Spectrum notes, Roche Holding AG begun collaborating with Cambridge Quantum Computing in January.
US manufacturer Honeywell boasted its own developments in quantum computing this month, noting that their System Model H1 achieved a quantum volume of 512, the highest measured on a commercial quantum computer to date. HPCwire.com writes that it is the third time in nine months Honeywell has set a record for quantum volume on one of its systems. The milestone represents a four-fold increase in performance for the System Model H1.
Last October, Honeywell CEO Darius Adamczyk predicted that, within the next decade, its quantum computing business will have sales of $1 billion.
Quantum Computing’s SPAC Debut
For the first time, a company specifically focused on commercializing quantum-computing hardware and software will be going public this year via a special purpose acquisition company (SPAC) deal.
Quantum-computing startup IonQ Inc. plans to merge with blank-check firm dMY Technology Group Inc. III and list on the NYSE. If the deal goes through, The Wall Street Journal notes that IonQ will boast a market cap of about $2 billion, having raised $734 million in funding since its founding in 2015, including $300 million through its planned merger and another $350 million in private investment funding from Hyundai Motor Co.
As IonQ’s website states, the firm’s technology is based on developing qubits that trap individual ytterbium atoms, a silvery rare-earth metal, in 3D space and use lasers to do everything from initial preparation to final readout.
The company has given about 20 million software developers access to its current early-stage quantum-computing device through partnerships with cloud-computing service providers Amazon Web Services and Microsoft. According to CEO Peter Chapman, IonQ expects to generate more than $1 million in revenue this year. Though they did not book any revenue in 2020, instead focusing on the development of its systems before release, IonQ did manage to pull in $200,000 of revenue in 2019.
“In addition to producing the first and only quantum computer available via the cloud on both Amazon Braket and Microsoft Azure, IonQ has defined what it believes to be the best path forward to scaling quantum computing power,” the company wrote in documents submitted to the SEC. “By 2023, IonQ plans to develop modular quantum computers small enough to be networked together, which could pave the way for broad quantum advantage by 2025.”
Other investors in IonQ include Samsung Catalyst Fund, Lockheed Martin Corp and Airbus Ventures, among others. |
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