The quantum computing bubble | financial times

Nikita Gourianov is a physicist at the University of Oxford specializing in computational quantum physics. Here he argues that people have become overly optimistic about the prospects of quantum computing.

Financial bubbles develop when large groups of investors repeatedly make poor investment decisions, often due to greed, misunderstanding, and quick bucks. A modern example of this is quantum computing.

Quantum computing is often portrayed as an emerging technology whose eventual impact is surpassed only by artificial intelligence. According to the quantum evangelists, it’s only a matter of time before a fully-functional quantum computer appears and can do everything from revolutionizing drug development to cracking internet encryption schemes.

Billions of dollars have poured into the field in recent years, culminating with the public launches of prominent quantum computing companies like IonQ, Rigetti and D-Wave, culminating in the most popular foamy market phenomenon of 2021, Special Purpose Acquisition Vehicles (Spacs).

Those three still have a combined market cap of $3 billion, but according to Refinitiv, combined sales of about $32 million (and about $150 million in net losses) are expected this year. Here’s what their stocks have done this year.

The reality is that none of these companies — or any other quantum computing company — are actually making any real money. The small amount of revenue they generate comes mostly from consulting missions aimed at teaching other companies “how quantum computers help their business,” rather than really taking advantage of all the advantages that quantum computers have over classical computers.

The simple reason is that despite years of effort, no one has come close to building a quantum machine that is actually capable of solving practical problems. Current devices are so error-prone that any information you try to process with them turns into noise almost instantly. The problem only gets worse when the computer is scaled up (i.e. the number of “qubits” is increased).

A convincing strategy to overcome these flaws has not yet been demonstrated, so it is unclear when – if ever – it will be possible to build a large, fault-tolerant quantum computer. But according to the evangelists, we appear to be in the midst of a quantum Moore’s Law (aka “Rose’s Law”, after D-Wave founder Geordie Rose), analogous to the microchip revolution of the 1970s-2010s.

Another fundamental problem is that it is unclear which commercially viable problems can be solved with quantum computers at all – if at all.

By far the most prominent application is the Shor algorithm for decomposing large numbers into their constituent primes, which is exponentially faster than any known equivalent scheme running on a classical computer. Since most of the cryptography currently used to protect our internet traffic is based on the assumed hardness of the prime factorization problem, the sudden appearance of an actually working quantum computer capable of running Shor’s algorithm would indeed pose a major security risk.

Shor’s algorithm was a godsend for the quantum industry and resulted in countless funding from government security agencies around the world. The caveat, often overlooked, is that there are many alternative cryptographic schemes Not vulnerable to quantum computers It would be far from impossible to simply replace these vulnerable systems with so-called “quantum-safe” ones.

And the uncertain practicality of Shor’s algorithm is just the tip of the iceberg. There has been much controversy as to where and when quantum computing can actually offer a practical advantage. The latest research indicates that there is no evidence that even quantum chemical calculations can be significantly accelerated with quantum computers. That’s bad news for the much-vaunted idea that quantum computing is useful for drug design.

Essentially, despite the fanfare, the quantum computing industry has yet to show any practical utility. So why is so much money pouring in? Well, it’s mostly because of the fanfare. Scientists’ views are still (mostly) respected in society, and when physicists get excited about something, people notice.

The excitement really started in the 1990s, which saw a series of groundbreaking breakthroughs that truly marked the birth of quantum technologies as an academic field. As more progress was made over the years, the excitement grew and eventually spread far beyond the community.

By the 2010s, capital had become cheap and investors were paying attention, even if they had no real understanding of the technology (apart from the cliché “a qubit can be one and zero at the same time”). As more money poured in, the field grew and it became increasingly tempting for scientists to exaggerate their findings. Over time, salesman-like figures, typically without any understanding of quantum physics, entered the field, taking senior corporate positions and focusing solely on creating fanfare. After a few years, a grossly exaggerated perspective on the promise of quantum computing reached the mainstream, sparking greed and misunderstanding, leading to the formation of a classic bubble.

Some physicists secretly believe there is no problem here: why not take advantage of the situation while it lasts and take the easy money from the less experienced investors? After all, earning a private-sector-level salary while doing essentially academic research is pretty good business.

Well, exactly when the bubble will burst is hard to say, but eventually the claims will be figured out and funding will dry up. I just hope that when the music stops and the bubble bursts, the public will still be listening to us physicists.

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