Quantum Mania: Amid the Present Puffery, A Seemingly Bright Future
You could say that it’s the best of times, the worst of times, and practically the non-existent times for quantum computing. The sentence I’ve just typed is paradoxical, but that doesn’t mean it’s wrong.
The information-technology industry seems to be forming a consensus that quantum computing is important and valuable; but the industry also believes that quantum computing’s practical value, by which I mean its capacity to generate revenue and profitability, remains a distant prospect in an imagined, soft-focus future.
When will quantum computing become commercially viable? Estimates vary, and nobody can know what the future will bring. Some cognoscenti say we will see commercially viable quantum computing in five to ten years, and some say it will take longer — perhaps much longer — than that.
Nvidia CEO Jensen Huang is camping with the latter cohort, which also includes Meta’s Mark Zuckerberg, well-known proponent of corporate “masculine energy,” and former Cisco CEO John Chambers, who has not yet, to my knowledge, taken a position on masculine energy. At the recent CES in Las Vegas, Huang told conference attendees that quantum computing would not become “very useful” for decades. If by useful, Huang means widely applicable in commercial scenarios, then we can conclude he is not bullish on the technology’s near-term capacity to provide returns on investment to technology users or suppliers.
Still, he and his company are not entirely dismissive of quantum computing. In fact, Huang and his employees are scheduled to host their own “Quantum Day” during Nvidia’s GTC 2025 conference in March. Quantum’s day of honor at GTC 2025 will feature Huang under the big top with C-level executives from quantum upstarts such as D-Wave Systems, IonQ, and Righetti Computing.
As for those startups, a few of them are publicly listed, even though they have modest revenues and no prospect of near-term profitability. Of the publicly listed quantum-computing companies, the share prices of three of them — D-Wave, Quantum Computing Inc., and Righetti Computing — appreciated in today’s morning trading, with the first two experiencing the sharpest gains.
A necessary caveat: Trading in these companies is speculative. It’s not that they don’t have any revenue, but they don’t have much. The meager revenue they generate derives from consulting, various other services, and a dollop of software. Righetti Computing, IonQ, and D-Wave, for example, provide access to quantum computing through cloud platforms and specialized applications. Not many customers have begun meaningful expeditions, but a few sherpas are breathing the thin air at quantum’s highest altitudes.
In the interest of belaboring the obvious, these quantum-computing newcomers are not profitable companies. Earnings are not certain to materialize for many quarters, if not years.
Inevitable but Not Imminent
What these companies have in their favor is a sense of technological inevitability. Few of quantum’s skeptics are unqualified naysayers. Most knowledgeable observers, and a similarly large proportion of unknowledgeable gawkers, believe that quantum computing’s market ascent is preordained. The question, though by no means the only one, is this: When will it happen? Another question: If you’re an investor, when should you make your first meaningful foray into the quantum space?
Let’s deal with the first question now, if only because it’s easier to answer. The answer is . . . well, your guess is as good as mine. I could give you an answer — say, seven years — and perhaps I’d be right; but, when those seven years have passed, nobody will remember what I said or whether I was right or wrong.
Then again, whether I’m right or wrong about a specific date or outcome doesn’t matter. For the record, though — a record that nobody will ever consult, much less play repeatedly at ear-shattering volume — I will put my imaginary money on seven or eight years, sooner than the predictions from quantum computing’s po-faced pessimists, who are not really so pessimistic, and later than the forecasts of quantum computing’s jaunty optimists.
In my experience, the middle ground in these matters is where success can be found. It’s usually how things work out, but not always. You have the Panglossian optimists at one end of the spectrum, and you have the Cassandra-like pessimists at the other end. At this point, though, I should mention that Cassandra, beneficiary of the gift of prophecy, was actually correct in her predictions, though she was disbelieved. Hmm, maybe I should set a longer timeline?
Addressing the Prerequisites
Regardless of where I put my theoretical wager, for quantum computing to amble from the speculative shadows and stride swaggeringly into the commercial limelight, several developments must precede its glorious triumph. We’ll need to see advances in quantum hardware, error correction, and algorithm development. Moreover, quantum computing will require its own software and a range of new applications, which must produce demonstrably better results than software applications running today on what we might call conventional computer systems.
Quantum computing must also seed the market with early adopters who are adequately trained and equipped to achieve compelling outcomes with the new technology. Those early adopters will need to identify and exploit “killer applications” that represent straightforward and substantial business cases deserving of customer outlays. All these things will take time to develop and propagate.
It’s funny, at least to me, that one of quantum computing’s use cases is predicated on what the technology will break first and then fix. I’m alluding, as you might have supposed, to cryptography. Many experts believe that quantum computing will break encryption methods such as RSA and ECC, necessitating the development and adoption of quantum-resistant cryptographic methods. Thus, quantum will giveth, but not before it taketh away. It’s a bit like a protection racket, but involving next-generation computing rather than guys who threaten to bust your fingers or vandalize your place of business. That perhaps makes quantum’s encryption play an ethical shakedown.
Other potential commercial applications for quantum computing include drug discovery and materials science, the former useful to cash-rich pharmaceutical behemoths, the latter to a wide range of companies seeking synthetic substitutes for expensive and often finite commodities and substances.
One promising application of quantum computing involves machine learning. Quantum algorithms could enhance and improve the efficacy of a broad swath of data analysis and pattern recognition. These might extend across areas such as image recognition, natural-language processing, and next-generation recommendation systems.
Financial modeling is another realm where quantum computing might prove its mettle, resulting in potential advances in the speed and accuracy of risk analysis and option pricing. There’s also reason for optimism in climate modeling and simulation, an area of abiding interest to countries and industries worldwide.
These applications hold value for users and vendors alike, but they depend on the satisfactory realization of the prerequisites discussed earlier.
Calculations and Vested Interests
Let’s now go back to Nvidia and its arguably pessimistic timeline for the commercial relevance of quantum computing. Might Nvidia’s view be colored by self-interest as much as, if not more than, objective considerations? Well, yes, that is a distinct possibility.
Nvidia, as you know, is the Taylor Swift of genAI, its share price the envy of all publicly listed companies, including the reigning technology overlords of cloud computing. Nvidia sells GPUs and AI accelerators, not quantum computers. The latter, however, might prove to be the best processing infrastructure for genAI’s ultimatum successor, the savior or satan (depending on one’s sensibility) known as artificial general intelligence (AGI).
Does Nvidia have a vested interest to slow-roll quantum computing? Yes, it does. That doesn’t mean Nvidia is necessarily wrong about the timeline for quantum-computing’s commercial success, but it does suggest that one should acknowledge Nvidia’s self-interest when considering its assessment of quantum computing’s prospects.
If Nvidia plays its cards adroitly, the company might seamlessly and lucratively transition from a business based on GPUs to one increasingly powered by quantum computing. To make that happen, Nvidia must continue to possess an outsized market valuation, which will give it the means to organically develop or inorganically acquire expertise in quantum computing. In that light, a Quantum Day at GTC 2025 makes exceptional sense. If one keeps friends close and enemies closer, one might keep future adversaries even closer at hand. Such propinquity gives Nvidia the opportunity to familiarize, learn, and adapt, all necessary as one ponders quantum computing’s looming question of buy, build, or partner.
Wait for It
All the while, the cloud giants, who already are working to reduce dependence on Nvidia and its GPUs, are also active, to varying degrees, in quantum computing. Like Nvidia, the cloud giants are strongly motivated to time their quantum move impeccably; they don’t want to get to market too early, but they definitely don’t want to be late. They also have the resources, financial and otherwise, to play the long game, to begin making incremental investments now for a payoff that might not arrive for several years. The cloud giants don’t want to depend on Nvidia for quantum-computing processors or infrastructure, and they’re already looking forward to brighter futures where they direct and control the technologies that confer the greatest possible cost savings, operational efficiencies, and competitive differentiation.
Meanwhile, there’s the question of when investors should take the quantum-computing plunge. Unless you’re a compulsive day trader, who doesn’t mind submitting to arbitrary buy and sell signals sparked by the offhand sentiments expressed by Mark Zuckerberg or Huang, you might want to hold your quantum fire for now.
You can take some guesswork out of the equation by waiting until one or two of the quantum-computing startups identifies and mines one or two compelling application streams that generate sluices of cascading revenue. At that point, you have a market leader, analogous to the market leadership that Nvidia established in GPUs for genAI. You can ride the wave for a wave. Now, though? You can take a shot, but you’d be gambling. Some people are comfortable with gambling on the stock market — and one can argue that there’s always an element of chance — but I would counsel risk mitigation. You’’ll still see robust rewards, and your risk profile will be considerably reduced.
After all, it’s probably too soon to predict which of the quantum-computing startup companies will prosper and thrive and which will falter and wither. You could put money on all of them and wait it out, but even that gambit might prove unsuccessful. There will be other startups, now private, that will go public, and the larger players — including Nvidia, the cloud giants, and IBM — have yet to play all their quantum cards.
The future is unwritten, but the hand will reach for the quill soon enough. You can wait to see what the first coherent sentences say.