There is a new trend beginning to emerge from the computing world. I am not talking about big data, cloud computing, machine learning, or even the lesser known edge computing. These are all evolutions of classical computing, a system based upon bits (0s or 1s), and the emerging trend will be radically different. What I want to discuss today is the coming revolution of quantum computing and, more importantly, how to look for investments in this field.
What is a quantum computer and why should I care?
A quantum computer performs calculations by utilizing the strange properties of quantum mechanics known as superposition (something can be in two places at once) and entanglement (to objects are closely linked and influence each other despite the distance between them). Diving too much into the physics of both properties will make heads spin and ache so I use a simple analogy to illustrate the main difference between quantum and classical computers. A classical computer is like a simple light switch in that its bits are either on or off. A quantum computer is more like a dimmer switch in that its bits – which are referred to as quantum bits or qubits - can be on, off, or somewhere between on and off. This capability, coupled with a few other properties that I will not go into here, allow for a quantum computer to potentially be significantly faster than classical computers because it can work on multiple problems at once using the same set of qubits.
When comparing where we are at today in quantum computing to the rise of silicon computing, many industry insiders believe that quantum computing is currently at the point just before the inventor of the transistor, William Shockley, won his Nobel Prize in 1956. Looking at how computing has developed between 1956 and now, it is easy to realize why I am recommending investors start analyzing this market now. Despite many similarities, this computing revolution will be radically different. You will probably never have a quantum smartphone or laptop because quantum computers will be used as tools to supplement classical computers in instances where it would be too time consuming or, in the most radical of cases, even impossible for a classical computer to solve. Although many of us will never use a quantum computer in our lifetime, there are still several key areas in which one can invest to benefit financially from the coming quantum revolution.
1. Companies offering timeshare quantum computers
Quantum computers are currently large and often require significant amounts of capital to develop and operate. This is very similar to original computers used to fill a room and leads to the interesting value proposition of timesharing. Many professional and educational institutions could benefit from using quantum computers to simulate complex biological problems to aid in research or drug discovery or test and improve AI models but will lack the resources to build or purchase their own. For society to recognize the immediate benefits of quantum computing, we will need companies that strategically position and market themselves to serve these customers that cannot afford one.
2. Secure communications using quantum cryptography
Secure communications can be developed utilizing the same properties that make quantum computers so useful. The strange quantum property of entanglement can be exploited to develop nearly unbreakable encryption. Companies that can develop, manufacture, and patent this hardware are poised to see huge opportunities in both the defense and telecommunications markets.
3. Hybrid technologies
The world runs on normal bits and will for the foreseeable future. Companies that develop hybrid technologies that can facilitate the technological gap between quantum systems and our current infrastructure will surely be some of the fastest growing and profitable companies taking part in the quantum revolution. This does not just apply to hardware but also software so that users around the world can use a classical computer and classical communications infrastructure to direct a quantum computer of the actions it must take. These technologies will be crucial to the success of the timeshare model I discussed above.
4. Classical communications quantum proof cryptography
Current cryptography is based upon the fact that it is very difficult for a computer to factor large numbers. Ironically, one of the most studied potential uses of quantum computers is the ability to factor large numbers. Currently, quantum computers are not sophisticated enough to break modern encryption and won’t be for some time, but this does not mean that a new or existing company could not benefit from a new, ‘quantum proof’ method of encryption. Any company which develops an alternative to the current classical cryptography that is also ‘quantum proof’ is situated to serve a large market consisting of defense agencies, telecommunications services, and financial entities looking to securely upgrade their current infrastructure against this developing threat.
I have presented just a few ways in which one can look for technologies and companies ready to benefit from the coming quantum computing revolution, but these are surely not all inclusive. As with the previous computing revolution, many companies large and small will attempt to enter the market with only a very few remaining to reap the financial benefits of market maturity. While it is still much too early to determine the victors of this movement, one should immediately begin researching how you can benefit financially from investing in the coming quantum computing revolution.
About the author
Matt Fritz is nuclear scientist for Mission Support and Test Services, a contractor to the US Department of Energy. He is a first year MBA student at UNLV.
Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of RVF or UNLV. In addition, thoughts and opinions are subject to change and this article is intended to provide an opinion of the author at the time of writing this article. All data and information is for informational purposes only.