The warning clearly comes from one of the most famous CEOs in the tech world. Sitting in front of an audience at the World Economic Forum in Davos, Switzerland, three years ago, Alphabet CEO Sundar Pichai said quantum computing has the potential to transform humanity’s understanding of the natural world. , allowing scientists to create new drugs and better batteries, among other advances. . But with that great promise comes risks: A widely anticipated commercially viable quantum computer that could penetrate the cryptographic techniques that secure the world’s financial and communications networks. gender. “The potential is huge, but we will have challenges,” Pichai said. “In a period of 5 to 10 years, quantum computing will break encryption as we know it.” After decades of growing advances in quantum computing, a group of giant technology companies and startups are on the verge of starting to commercialize it. As more pure quantum companies become publicly traded companies, investors will do well to at least watch the burgeoning sector, which analysts say has the potential to disrupt the world. technology world, creating billions of dollars in value in the process. Since the birth of the concept in the early 1980s, quantum computers have promised systems that can outperform today’s computers exponentially. Instead of relying on classical computer zeros and zeros, quantum computers emerged from quantum physics, which is the study of the fundamental building blocks of matter and energy. The laws of quantum mechanics allow the smallest particles to exist in many states at once. So, unlike conventional computer binary bits, quantum bits, or qubits, can simultaneously be a combination of 0 and 1, as well as any value in between. Those uncanny properties explain the technology’s potentially explosive potential; each additional qubit doubles the power of a quantum computer. The quantum leap The race to achieve a working quantum computer capable of solving problems beyond the reach of today’s computers has heated up in 2019. That’s when researchers at Alphabet’s Google division claims a breakthrough: It says its 54-qubit machine, Sycamore, performed a task in minutes that would take a traditional supercomputer 10,000 years. Not to be outdone, IBM announced in May that it plans to deliver a 4,000-qubit computer by 2025. While industry observers argue that the threshold for widespread commercial use will be one 100,000 qubit machine, IBM claims its quantum computer will be able to start solving some of the more fundamental problems this technology has to solve, including portfolio optimization for companies finance. Although still in its infancy, the quantum computing hardware and services market will grow at a compound annual rate of 50% from $475 million last year to about $2.5 billion, according to Cowen analysts. by 2025 and $19 billion by 2030. Krish Sankar of Cowen likened the nascent field of quantum companies to early-stage biotech companies, where “drug timing can be difficult to predict. effective”. Many companies are using different strategies to solve the scaling problem in qubits. Sankar said: “Nobody knows which will work; maybe all are. “Most of them have a deadline within the next three to five years to have enough qubits” for commercialization, he added. As next-generation computers are expected to be able to simulate chemical reactions at the molecular scale, enabling a leap forward in materials science and drug development, pharmaceutical companies , chemical and automotive are among the first sectors to benefit. But that computing power carries risks, as Alphabet’s Pichai referenced. Quantum computers are expected to be able to solve the mathematical problems that underlie most cryptographic techniques today, such as securing web pages and emails. That could threaten global financial and technology companies and pose risks to cryptocurrencies, such as potentially allowing hackers to steal bitcoins. That has spurred investment and raised awareness among business executives. For example, JPMorgan Chase has built an in-house team of scientists who, among other things, help drive the development of next-generation communication networks that are secure from the quantum threat. According to research firm Gartner, nearly 40% of large corporations are expected to start their own quantum projects by 2025. Given the enormous cost and cumbersome size of the project, analysts say. With quantum computing, most companies are expected to exploit this technology through the cloud. Interest in futuristic technology – which often requires maintaining large hardware rigs in super-cool temperatures – has exploded in recent years as venture capitalists pour money into the sector. According to McKinsey, startups focused on quantum technology received US$1.4 billion last year, double the size of the entire industry in 2020. However, this nascent field has been limited. technology development process this year. Some public quantum companies took advantage of last year’s deadline for smaller, unprofitable companies to list through SPAC deals. But all of them are currently trading below list price and are not beneficial to investors who are currently prioritizing profit over growth. The growing cash flow and coverage of the technology has generated a backlash. Oxford University physicist Nikita Gourianov wrote in an August report that it’s unclear whether a “large-scale, fault-tolerant” quantum machine will ever be built. According to Gourianov, the quantum computer is an over-inflated bubble with no practical application. Among their challenges, computers are extremely sensitive to environmental disturbances which corrupts its information, making them highly error prone. According to Konstantinos Karagiannis, a quantum computing expert at consulting firm Protiviti, there are two reasons why quantum computers must overcome its technical challenges. Quantum computers will be able to compensate for bad qubits (caused by extremely small amounts of heat or electromagnetic fields) through a technique known as “error correction,” he said. On top of that, larger quantum computers will be created by connecting smaller modules, he added. “I’ve seen some amazing advances in qubit fidelity,” Karagiannis said in an interview. “We don’t need perfect qubits, we need them to be really good, and then we need enough of them to do the so-called error correction.” According to Bernstein, while more than 200 quantum-related companies exist today, only 4 of the pure plays are publicly traded. These are named the D-Wave System, the Rigetti Computer, IonQ, and the Quantum Computer. Cowen recommends Berkeley, California-based Rigetti Computing, which develops circuits for quantum computers and provides a cloud platform that allows engineers to design quantum algorithms. According to Cowen, the nine-year-old company, founded by a former IBM physicist, is “well positioned” to benefit from adopting quantum computing as a service. Quantum Computing focuses on enterprise software solutions and is highly regarded by Ascediant Capital Markets’ Edward Woo, who is expected to see “strong growth” over the next year as the company ramps up its marketing. “With being at the forefront of this rapidly growing industry, we believe Quantum is well positioned to capture and drive a meaningful market share,” Woo wrote in a recent note raising the bar. its price target for the Leesburg, Virginia-based company to $9.50. Shares are down 33% this year and last closed at $2.27, implying a 319% gain if Woo’s goal is achieved. Other companies that will gain revenue from quantum computing include Applied Materials and MKS Instruments, according to Cowen. Applied Materials, which supplies equipment to semiconductor and display manufacturers, will benefit from increased demand for superconducting chips, Cowen said. MKS, a supplier to manufacturers of advanced semiconductors and electronics, can supply the industrial lasers needed in various quantum rigs. However, even its promoters admit that quantum computing adoption can be a bumpy ride for investors, given the speculative nature of the field and the unknowns surrounding it. commercialization. A more conservative way to play the field might be through owning big established tech companies. Alphabet and IBM are poised to become big players in quantum computing, if their investments are any indication. Last year, Alphabet’s Google announced a multibillion-dollar plan to build a commercial-grade quantum computer by 2029, with the backing of its new quantum campus in California. Meanwhile, IBM has made the biggest commitments to quantum, with hundreds of employees, more than 20 quantum computers, and a cloud service with more than 360,000 users. Last year, Microsoft launched its Azure Quantum cloud service, a complete service that allows customers to access quantum hardware and software. The tech giant has eight quantum computing labs around the world and is working on developing its own quantum computer based on a potentially more stable form of technology. Quantum supremacy Efforts from large, well-funded companies as well as startups bode well for the industry. So-called quantum supremacy – the time when quantum computers can reliably perform calculations far beyond the reach of traditional supercomputers – could happen by the end of the decade, according to the report. JPMorgan’s Marco Pistoia, a quantum expert who spent most of his career at IBM. Pistoia said in a podcast: “Even now quantum computers are not yet as powerful, we don’t have much time left. Corporations need to prepare for that moment now or risk falling behind, he said. That progress gives others encouragement. “We’re seeing these major milestones happening, so I’m sure we’ll get there,” Karagiannis said. “The machines are getting really, really good.”
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