Artificial intelligence is clearly the latest craze sweeping the technology industry, but an even bigger trend may be on the horizon in the form of quantum computing — provided it can solve troubling cybersecurity questions.
Advances in quantum computing seem destined to humble today's electronic chip-based supercomputers. These machines work on a subatomic level and use exotic technologies, like super-cold superconductor chips. And quantum computing's ultimate benefit is that it solves problems too complex for today's classical computers.
Technology titans such as IBM, Google-parent Alphabet, Microsoft and Intel — as well as a number of startups — already are touting achievements with these experimental machines. Further, cloud computing giants are laying the groundwork to offer quantum computing-as-a-service.
"Everyone sees the quantum market coming. There's still debate over when and how but quantum computing is on the horizon," said Chris Hume, senior director of business operations at quantum computing startup SandboxAQ. Among a wave of quantum computing startups funded by venture capital, SandboxAQ was spun off by Google last year.
"Many of the applications of the technology are unknown so it'll be exciting to see how that evolves over time," Hume told Investor's Business Daily.
But while the AI possibilities are there, the cybersecurity threats are also real. For one, it's unclear where countries like China stand in their development of quantum computers. That's a big issue because quantum computers will eventually overpower current data encryption technologies. In turn, foreign intelligence agencies could pose an even bigger cybersecurity threat.
Artificial Intelligence News And AI Stocks To Watch
Quantum Computing To Boost AI?
There's also the question of when quantum computing will actually flourish. Much like AI, quantum computing has been hyped for decades. In fact, researchers expect quantum computing to be helpful in advancing machine learning, a type of AI.
But AI in the business world seemed moribund until content-creating generative AI took the world by storm in late 2022. Meanwhile, it's unclear what the killer app for quantum computing might be.
For now, intriguing partnerships are popping up. Moderna announced in April it will partner with IBM to use its quantum computers and generative AI technologies to advance mRNA vaccines and therapies. Vaccines using mRNA were used to inoculate against Covid-19.
Still, industry players expect electronics-based supercomputers to survive. Quantum computers will not replace them. Rather, they're expected to coexist, with quantum computers likely assisting in solving the most pressing problems, like modeling climate change.
"Quantum computers today do not outperform classical, traditional computers for problems in the real world," Richard Moulds, general manager of Amazon Web Services' Braket quantum computing service, told IBD. AWS is the cloud computing arm of Amazon.com.
Searching For Quantum Computing Advantage
"There have been a couple of examples where a quantum computer has been demonstrated to solve a mathematical problem that a classical computer can't. But those problems were synthetic and were created to show off the capabilities of quantum computers," Moulds went on to say.
He added: "That has been called quantum supremacy — where a quantum machine has done something uniquely that a classical computer cannot do. We've crossed that point in a couple of areas but not in a way that is commercially interesting to customers."
AWS offers researchers access to quantum machines from the likes of IonQ, Oxford Quantum Circuits, QuEra, Rigetti Computing and Canada-based Xanadu Quantum Technologies. Also, Amazon is building quantum computer prototypes at the California Institute of Technology in Pasadena, Calif.
"The next milestone in the industry would be described as the quantum advantage. That's when a quantum computer actually is faster, or cheaper, or uses less power than a classical computer to solve a problem that is of commercial interest," Moulds said.
He added: "No one knows. It should probably be before the next 10 years. It could be maybe in the next three, four years. It's possible quantum computers will be in the regime of being commercially advantageous before they are large enough to crack public encryption keys."
Running Quantum Software On Supercomputers
Market research firm Gartner forecasts that by 2025, the top 50% of automakers, banks and pharmaceutical companies will be "involved in quantum-inspired initiatives."
"A lot of the research we're supporting is figuring out exactly and getting crisper about where quantum computers are going to be useful first," said Sam Stanwyck, Nvidia's senior product manager for quantum computing software.
"We see the most activity in any application that involves simulating chemistry or biology. In pharmaceutical, that gets into drug design. In the energy space, potentially designing better batteries, and general material simulation," Stanwyck told IBD. "There's AI machine learning optimization, cases in quantitative finance. I wouldn't say it's crystal clear what the first killer app of quantum computers will be."
At its GTC developers conference in March, Nvidia said it's partnering with researchers to develop programming software for quantum computing simulations. Part of that strategy involves running prototype software designed for quantum computers on today's supercomputers.
For example, Nvidia works with Israel-based Quantum Machines to run algorithms used in quantum physics on supercomputers built with AI chips. Some quantum computing startups are taking a similar approach, testing quantum software on supercomputers.
Threat To Cybersecurity
There is a dark side, though. One expected application of quantum computers will be to break the most widely used cybersecurity protocols in the world.
The most common public-key cryptography method is RSA, named after its developers, software engineers Ron Rivest, Adi Shamir and Leonard Adleman. RSA uses cryptographic keys — strings of characters in an algorithm — to protect data.
In many cybersecurity systems, public key encryption works by using a pair of keys, one public and one private, to encrypt and decrypt messages. The public key can be shared freely but the private key is kept secret.
The worry is that a foreign power will one day develop quantum computers powerful enough to crack RSA.
"We do know that nation states are investing heavily in building a quantum computer specifically engineered to be an RSA cracker by deploying Shor's algorithm," said SandboxAQ's Hume. Shor's algorithm is a method used to override RSA encryption.
The good news is that quantum computers currently aren't powerful enough to crack public encryption methods. But the clock is ticking.
By 2029, "advances in quantum computing will make conventional asymmetric cryptography unsafe to use," Gartner said in a study.
The Government And Quantum Cybersecurity
The U.S. government hasn't been taking any chances. The National Institute of Standards and Technology, or NIST, began work on developing new quantum-resistant algorithms in 2016.
NIST has been narrowing down the list, and in 2022, it picked four leading candidates. NIST expects to release so-called "post-quantum cryptography," or PQC, standards by 2024.
Among U.S. companies involved in the PQC project have been IBM, Amazon Web Services, Microsoft, Cisco Systems, Dell and VMware. SandboxAQ and startups Cryptosense and Crto4A Technologies also have taken part.
Banks, telecom firms, health care systems and U.S. government agencies have tested the new quantum-resistant algorithms. After NIST releases the PQC standards in 2024, cybersecurity firms can develop new products. And, U.S. businesses will need to upgrade all kinds of software to PQC encryption.
Meanwhile, Google is among cloud service providers that are already integrating PQC technology into products and services.
"We're well into a multiyear effort to migrate to post-quantum cryptography that is designed to address both immediate and long-term risks to protect sensitive information. We have one goal: ensure that Google is PQC ready," Google said in a blog.
Store Now, Decrypt Later
Google and Cloudflare in 2019 partnered to test PQC technology.
In March, Cloudflare said it began providing PQC-type services for free to customers to improve cybersecurity on their websites.
Started in 2009, Cloudflare speeds up and provides security for web applications routed through its global network. Cloudflare Chief Technology Officer John Graham-Cumming told IBD it's not premature to offer PQC-type services because bad actors could already be seizing and storing sensitive data. Using quantum computers built in the future, they may be able to decrypt data.
Cybersecurity analysts refer to the threat as "Store Now, Decrypt Later."
"From a cryptography perspective there is the issue that if someone were to store encrypted communications today, think of an intelligence agency in some country, they may be able to decrypt it in the future," said Graham-Cumming.
He added: "The history of computing and intelligence would tell us that intelligence agencies get things before the rest of us. It's not unreasonable to think that around the world an intelligence agency would like to have a working quantum computer."
How Quantum Computing Works
Traditional computers use electronic circuits to store information as digital 0s and 1s. Quantum computing speeds up complex calculations by taking advantage of quantum physics. Instead of classical computing bits, which can be either 0 or 1, quantum computers use quantum bits, called qubits.
Qubits can be in a state of 0, 1 or both at the same time. This allows quantum computers to perform many calculations simultaneously. Also, qubits link with other qubits, a property known as entanglement.
A task that takes a supercomputer days or weeks to handle will be solved by large-scale quantum computers in seconds.
Quantum computers face challenges in scaling up, noted Nvidia's Stanwyck.
"A quantum computer is a completely different physical model that comes with big advantages and some drawbacks," Stanwyck said in an interview.
For example, today's quantum computers are susceptible to changes in temperature, noise, motion or electromagnetic fields. Further, disturbances can cause a qubit's quantum state to collapse.
Quantum Computing Startups Grab Funding
IBM in November 2022 unveiled a 433-qubit quantum computer, three times bigger than its 2021 machine. IBM aims to develop a 4,000 qubit machine by 2025.
Google's experimental quantum computers have used less than 100 qubits. Google aims to build a quantum computer by 2029 with 1 million qubits capable of performing reliable calculations without errors.
Gartner analyst Mark Horvath expects synergy to emerge between quantum computers and machine learning, a type of AI.
"Machine learning and quantum work together very well," he said.
Machine learning systems analyze huge troves of data to train AI models. Still, Horvath cautions that quantum computers will not outperform traditional computers in most cases.
"There's going to be a mix of classical and quantum computing," he said. "(Companies) should not think of quantum computers as a magical supercomputer that does everything really well. They're really better at optimization."
Big Losses For Public Quantum Companies
Unlike artificial intelligence, where startup OpenAI has charged ahead in generative AI with the help of Microsoft, a wave of quantum computing startups has yet to produce a clear leader.
Venture capital funding, though, continues to flow to many startups, including SandboxAQ and Quantum Machines, as well as SEEQC, U.K.-based Oxford Quantum Circuits and others.
Meanwhile, some public quantum computing companies — D-Wave, Rigetti, IonQ and Quantum Computing Inc., to name a few — continue to underperform as they run up big losses on modest revenue. Shares of IonQ, however, have ticked up lately.
As in artificial intelligence, there are few pure-play quantum companies to invest in. Tech industry incumbents, like IBM, hope to get a boost some day from quantum computing.
One lesser-known player in the quantum computing race is Honeywell International. In 2021, Honeywell merged its Quantum Solutions business with Cambridge Quantum, forming Quantinuum.
Further, Honeywell uses "trapped-ion" quantum computing technology. IBM and Google use superconducting technology. Also, there are several other quantum computing technologies.
Meanwhile, IonQ reported a first-quarter loss of 14 cents a share vs. a 2-cent loss a year earlier. Revenue rose 120% to $4.3 million.
The company has signed research deals with the Fidelity Center for Applied Technology and UAE Quantum Research Center.
"While we still believe IonQ is several years away from reaching breakthroughs that demonstrate quantum advantage, we remain enthused about initial customer traction and still see a solid balance sheet capable of funding the R&D and commercial ramp ahead of broader commercialization," Morgan Stanley analyst Joseph Moore said in a recent note to clients.
Quantum-As-A-Service From Cloud Giants
Because large, commercial quantum computers will require perfect conditions to operate, analysts expect them initially to be located in government research labs and cloud computing data centers. Not many companies will be able to afford the millions of dollars needed to put quantum computers in their own data centers.
Gartner's Horvath expects many U.S. companies to try out quantum-as-a-service from cloud computing giants.
"If companies buy quantum-as-a-service they don't have to worry about all the details and what's happening under the covers," he said.
"Every cloud provider has a quantum partner or is building their own," Horvath added. "Right now IBM is doing well in the space. Microsoft and Google also are building their own."
Meanwhile, Nvidia is working with Germany's Julich Supercomputing Center and ParTec on a hybrid classical-quantum computing lab project. The Julich center aims to connect a classical supercomputer with a quantum accelerator.
Finally, IBM in May announced a new partnership with the University of Chicago and the University of Tokyo to research quantum computing development.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.
