Quantum Business Models
How to make money from Quantum Computing
An IBM’s research lab in Yorktown Heights, New York, the big tech company, houses several quantum computers already hooked up to the cloud. Corporate clients such as Goldman Sachs and JP Morgan are part of IBM’s Q Network, where they can experiment with the quantum machines and their programming language.
So far, it’s a way for companies to get used to quantum computing rather than make money from it. Quantum computers need exponentially more Q-bits before they start doing anything useful. IBM recently unveiled a fifty-three Q-bit computer the same size as Google’s sycamore processor.
We’re actually going to need tens of thousands, hundreds of thousands of Q-bits to get to real business problems. So you can see quite a lot of advances and doubling every year or perhaps even a little faster is what we need to get us there. That’s why it’s 10 years out, at least.
Quantum computing would need to see some big advances between then and now, bigger advances than what occurred during the timeline of classical computing and Moore’s Law. Moore’s Law is doubling every two years. We’re talking doubling every year. And occasionally some really big jumps.
So once quantum computers become useful? What can they do?
Scientists first came up with the idea for quantum computers as a way to better simulate quantum mechanics. That’s still the main purpose for them. And it also holds the most moneymaking potential.
So one example is the caffeine molecule. Now, if you’re like me, you’ve probably ingested billions or trillions of. Caffeine molecules so far today. Now, if computers are really that good, really that powerful. We have these tremendous supercomputers that are out there. We should be able to really take a molecule and represented exactly in a computer. And this would be great for many fields, health care, pharmaceuticals, creating new materials, creating new flavorings anywhere where molecules are in play. So if we just start with this basic idea of caffeine, it turns out it’s absolutely impossible to represent one simple little caffeine molecule in a classical computer because the amount of information you would need to represent it, the number of zeros and ones you would need is around 10⁴⁸!
Now, that’s a big number. That’s one with forty-eight zeros following it. The number of atoms in the earth is about 10 to 100 times that number. So in the worst case, one caffeine molecule could use 10 percent of all the atoms in the earth just for storage. That’s never going to happen.
However, if we have a quantum computer with 160 Q-bits, it looks like we’ll be able to do something with caffeine, a quantum computer, and it’s never going to be possible with a classical computer.
Wall Street
Complex risk analysis and economic forecasting. Quantum computing also has big potential for portfolio optimization.
Being Quantum-Proof
Perhaps the biggest business opportunity out of quantum computing in the short term is simply preparing for the widespread use of them. Companies and governments are already attempting to quantum-proof their most sensitive data and secrets.
Breaking Encryption
In 1994, a scientist at Bell Labs named Peter Shaw came up with an algorithm that proved quantum computers could factor huge numbers much more quickly than their classical counterparts. That also means quantum computers if powerful and efficient enough could theoretically break RSA encryption. RSA is the type of encryption that underpins the entire internet. Quantum computers, the way they’re built now, would need millions of Q-bits to crack RSA cryptography. But that milestone could be 20 or 30 years away and governments and companies are beginning to get ready for it.
Quantum-safe encryption
For a lot of people, that doesn’t matter. What this means, for example, is if you’re a Cisco selling networking equipment, you’re going to offer quantum-safe encryption as an option in the very near future. Because even though it doesn’t look like you need it right away. If your product doesn’t have it and a competitor does, guess which product gets bought?
Quantum Future?
One big issue facing quantum computing, other than increasing the number of Q-bits while keeping things stable, is that no one actually knows the best way to build a quantum computer. Yet the Quantum computers, a Google of IBM and other companies show off are very much still experiments. There’s also a big education gap. Not many people are studying quantum computing yet. China is pouring billions into quantum computing education, and the U.S. Congress passed a law in 2018 called the National Quantum Initiative Act in order to help catch up watching people get rid of him.
Which means that you want to invest in them now. You want to be hiring people with quantum computing knowledge. Not necessarily to do quantum computing, but because you want that intelligence in your organization so you can take advantage of it when it shows up.
Now China, with its promised $10 billion in it, is really upping stakes in terms of the number of Chinese quantum physics PhDs that are going to start appearing. And you know if that hair restoration or life extension drug happens to be the property of the Chinese government, what does that do to the world economy? That’s much more powerful than making war.
Other experts have compared Google’s announcement to Sputnik, the Soviet satellite launched into orbit in 1957. The beach ball-sized satellite was the first manmade object to orbit the Earth. But Sputnik didn’t really do anything useful other than proving to launch something into space as possible.
For those who are just getting started, they like to make noise about vacuum tubes and Sputnik and things like this. But let me give you some numbers. IBM has had quantum computers on the cloud for three and a half years since May of 2016. We’re not in any sort of Sputnik era. We’re not landing on the moon. But for those of you who like space history, I think we’re probably well into Mercury or Gemini.
