Quantum computing remains far from commercialization, but 2021 brought it several steps closer

As far as emerging tech goes, 2021 was the year of many things: the metaverse, crypto, climate tech, EVs, space.

It was also a year that saw quite a bit of activity in quantum computing. Though the technology still remains at least a decade out from commercialization, per Rand research, 2021 saw the field reach several milestones in service of that bigger goal.

Let’s look back…

100-qubit barrier: In November, IBM claimed to have produced the world’s most powerful quantum computer yet, thanks to its new 127-qubit processor named Eagle. The previous record-holder was also an IBM invention, a 65-qubit processor called Hummingbird. (Reminder: A qubit is the quantum equivalent of a bit in classical computing, and the more qubits you have, the more powerful your machine.)

• The company says it was able to crack the 100-qubit barrier thanks to a new layering technique it developed for its quantum processors, and it plans to apply its learnings to build a 433-qubit processor called Osprey next.
• IBM believes this tech will be able to outperform classical computers at certain tasks within two years, a feat called “quantum advantage” or “quantum supremacy.”

“Quantum computing obviously promises a lot—our goal is to achieve something that we call quantum [advantage], which is doing something that’s cheaper, faster, and more accurate than what can be done classical,” Jay Gambetta, VP at IBM Quantum, told Emerging Tech Brew at the time. “We don’t want to reinvent programming or computers; we want to work out how quantum computing will be embedded into where developers already are and just accelerate what they’re doing.”

Funding: Global quantum computing funding soared to $1.7 billion in 2021, per McKinsey analysis of Pitchbook data, more than double the $700 million raised in 2020.

• Even with the obligatory caveat that 2021 has been record-breaking for all startup funding, quantum funding has never even exceeded $500 million before 2020.
• More than 70% of the funding went to hardware players.

One company powering this surge: PsiQuantum, a US–based quantum-computing company, raised $450 million in funding that it will use to try and build a 1 million qubit computer.

Deals: As is only natural in this day and age, there were several quantum computing SPACs in the past year.

• In October, IonQ SPAC’d at a $2 billion valuation. A few days later, another US–based quantum-computing company named Rigetti SPAC’d as well, at a $1.5 billion valuation.

But in addition to the reverse mergers, we also saw a traditional one: In late November, Honeywell’s quantum-computing division merged with a leading quantum-software maker to create a company called Quantinuum. Honeywell retained 54% control over the company, invested $300 million in it, and will also be an initial customer.

…now let’s look ahead

Within the next five years, we could see some niche commercial applications of quantum computing tech, per Rand, but “the most important” applications—like designing advanced materials or aiding in drug discovery—are at least a decade away.

• A recent McKinsey report more or less agrees, saying that within this decade we’re only likely to see hybrid classical-quantum use cases, which would help with similar use cases as quantum computing is imagined to (e.g., optimization, materials simulation), just with a lot less power.
• Hybrid classical-quantum algorithms have been accessible via AWS’s Amazon Braket program since 2019. Braket makes computers from quantum companies like IonQ, Rigetti, and D-Wave available to users.

And just to hammer home the ~2030 timeline for true quantum use cases, McKinsey says that five manufacturers have announced plans to have fully fault-tolerant (i.e., they have adequately low error rates) quantum computers by 2030. In other words, 2030 is likely the soonest a practical version of pure quantum computing could be available at scale.

Big picture: Given that relatively lengthy path to practicality (and, ultimately, profit) and the record levels of funding flowing into the space, there’s concern about the potential emergence of a “quantum winter,” akin to the AI winters of yore.

“Some quantum industry trackers and startup founders are concerned that the current level of private startup activity in quantum technology may be excessive and premature and that unreasonably high expectations may lead to a sudden crash in investment in a few years,” Rand wrote in its report.