The quantum technology sector is experiencing a surge in growth and record-breaking investments, with global interest at an all-time high.
The quantum technology sector is experiencing a surge in growth and record-breaking investments, with global interest at an all-time high. However, while optimism abounds, experts caution that the industry may be verging on over-hype.
This burgeoning industry encompasses companies and organizations dedicated to advancing cutting-edge quantum hardware, software, applications, and associated services. Research institutions, universities, and government agencies are also actively contributing to the development of quantum technologies.
In 2022, total annual investment in quantum start-ups soared to an unprecedented $2.35 billion, although the industry’s actual growth was a modest 1% year-on-year. A report from global consulting firm McKinsey & Company sheds light on this flourishing sector, illustrating how heightened interest has translated into substantial funding.
Over the past two years, investors have injected substantial capital into quantum computing startups, with an astounding 68% of all investments since 2001 occurring during this short span.
Notable investments in 2022 included a remarkable $500 million raised by software startup SandboxAQ, as well as major deals worth hundreds of millions of dollars for companies such as Rigetti, D-Wave, and Origin Quantum, both in hardware and software development.
These investments underscore the escalating interest and anticipation surrounding quantum computing, indicating a potential era of substantial growth and progress in the coming years.
McKinsey’s analysis predicts that automotive, chemicals, financial services, and life sciences industries will likely experience the earliest economic impact from quantum computing starting in 2023. These sectors stand to potentially gain up to $1.3 trillion in value by 2035.
Moreover, public investments in quantum computing have seen a significant uptick, with major countries allocating substantial funds for research and development. The US, EU, and Canada have committed $1.8 billion, $1.2 billion, and $0.1 billion respectively.
IBM’s recent unveiling of the Osprey quantum processor, boasting 433 ‘qubits’ (quantum bits), marks a significant leap forward, offering more than triple the processing power of its predecessor released just two years prior. IBM also outlined plans to develop a remarkable 4,000+ qubit processor by 2025.
Despite these advancements, quantum computing is still in its early stages, with components and hardware requiring refinement. Challenges, both practical and theoretical, must be addressed before quantum computers can find widespread practical applications.
While quantum technology holds immense promise, experts caution against rapid adoption due to potential risks and misuse. Some physicists warn of over-exuberance, asserting that the current valuations of quantum technology sector may be inflated.
Theoretical physicist Sabine Hossenfelder from the Frankfurt Institute for Advanced Studies advises, “It’s not going to change the world, it’ll have some niche applications at best, and it’s going to take much longer than many start-ups want you to believe.”