In today’s Exponential Investor…
- A new dimension to the computing industry
- Qubits and pieces
- The quantum-computing wave
Until 1998, the computing industry was one-dimensional.
All computers used the same processing system, known as binary bits (I’ll explain shortly).
Charles Babbage, the “father of computing”, invented the first computer in 1822. It was steam-driven, weighed around three tonnes and called the “Analytical Engine”.
This lay the groundwork for modern computing and, ultimately, the groundwork for binary processing.
Before 1998, the binary system was all the computing industry knew.
However, American innovators Isaac Chung, Neil Gershenfeld and Mark Kubinec had other ideas.
They created a new type of computer that could blow traditional computer systems out of the water.
Not even the science world, let alone the computing world, was ready for what was to come.
Bits and qubits
Traditional computing systems are comprised of binary bits.
Bits are a sequence of “ones” and “zeros” that encode information. Each bit is subject to one defined state: zero or one.
This binary system has proven exceptionally efficient over the years. But what if there was a better system? A non-binary system that could factor in everything else that exists between zero and one?
This is the theory behind quantum computing.
Quantum-computing systems use qubits. Qubits are comprised of charged particles called ions.
Unlike bits, qubits can take on multiple states simultaneously, meaning they’re not only restricted like binary systems to zero or one in their design.
This means quantum computers are able to process exponentially more outcomes than traditional computers. They can compute zero, one, and the infinite possibilities that exist between those states.
Honestly, it does sound like some kind of sorcery.
But to really understand quantum computing, you shouldn’t even think of quantum computers as actual computers, but more organisms.
Quantum computers aren’t something you jump on to to surf the web. You don’t use them to quickly Google information.
Rather, their wizardry is applied to simulate real-world scenarios.
For example, in electric-vehicle (EV) batteries, quantum computers can simulate the behaviour of lithium-oxide ions, and this can help identify improvements that can be made in battery capacity and durability.
This can save EV manufacturers huge amounts of time and money, as they don’t have to invest in experimental R&D processes that may turn out to be unsuccessful. They can use data from quantum simulations to avoid having to test, try and waste valuable resources.
Other practical uses for quantum computers include drug development, forecasting weather and more efficient logistics.
However, it’s still very early days. Much of the development is still theoretical. But for companies working on the practical nature of quantum computing, the potential looks huge.
The dawn of a new era
So, we find ourselves at the dawn of a quantum-computing era.
The path to commercialisation has become far clearer, particularly over the past year.
A roadblock to scalable quantum-computing systems has always been incoherence. Think of it a bit like heat escaping from a poorly insulated and sealed house.
Technically it’s where the energy dissipates from the processing, reducing processing power. For instance, this can be through noise vibrations and temperature changes.
Quantum systems are quite fragile, so, for a long while, incoherence was hard to fix.
However, ground-breaking advancements are currently being made.
For example, IBM (NYSE: IBM) managed to achieve a 99.91% fidelity rate (a measure of coherence) with its Falcon r10 quantum system. The highest possible level of coherence is 99.99%.
When you consider that the first quantum system in 1998 was only coherent for a few nanoseconds, this is a significant improvement.
In addition, IBM managed to break the 100-qubit barrier in December 2021 with its Eagle, 129-qubit system.
Theoretically, a 100-qubit processor is more powerful than all the supercomputers on the planet combined.
So, it’s mind-boggling to think that IBM is hoping to release a 1,000-qubit processer in 2023.
In terms of qubit states, this processor would be able to process four times the number of atoms in the entire universe.
It’s unsurprising that the quantum-computing industry is grabbing the attention of corporations and policymakers alike.
UK prime minister Boris Johnson has promised that the UK will “go big” on quantum computing, and it seeks to secure 50% of the global quantum-computing market by 2040.
And US President Joe Biden is pushing US congress to pass legislation that will increase the United States’ technological competitiveness.
In fact, last year, President Biden revealed plans to spend up to $15 billion on quantum computing to combat climate change.
According to Fortune Business Insights, the quantum-computing market is estimated to grow from $486.1 million in 2021 to $3.18 billion in 2028.
The quantum-computing wave
There are a few pure-play quantum-computing stocks out there. Admittedly, these carry greater risk given the infancy of the industry.
There are only around 30 quantum computers worldwide.
Google developed a quantum-computing system known as Sycamore in 2019. It has 53 qubits in total.
By 2029, Google hopes to build an error-corrective (perfect) quantum computer comprised of 1,000,000 qubits.
Finally, US tech conglomerate Honeywell (NASDAQ: HON) explores quantum computing.
Its System Model H1 has ten qubits. The company claims to have achieved the highest level of quantum volume, which factors in the number of qubits, error rates, and the connectivity of qubits.
What’s interesting is that Honeywell’s quantum-computing business subsidiary, Honeywell Quantum Solutions, merged with Cambridge Quantum Computing in December 2021.
The merged entity is called Quantinuum and is not publicly listed. Honeywell estimates that Quantiuum will provide it with $2 billion of sales by 2026.
A fad this is not.
Until next time,
Contributing Editor, Exponential Investor