Tech & Vendor Rivalry Speeds the Arrival of Quantum Computing Age

Technology News | 2024-06-10

Google's experimental demonstration of "quantum supremacy" in 2019 gave us the opportunity to imagine the advent of the quantum computing era, and the investment and development competition by governments, academia, industry, and venture capital (VC) has been "overheated" for some time. However, there is a significant gap between the excessive expectations of end-users and the practical application of quantum computing, and the Generative AI has immediate business benefits compared to the future value of quantum technology. Therefore, as industry leaders and venture capitalists focus on investing in generative AI, quantum computing is starting to feel the impact. Since the second half of 2022, venture capital investment activity has declined significantly, to the point where "quantum winter" has crossed our minds.

However, if we look at the big picture of quantum computing, we can see that the quantum computing era is steadily approaching due to the efforts of stakeholders such as government, academia, industry, and end users.

Government and public funds, along with leading companies, show no signs of easing their investment activity

To be sure, the phenomenon of over-expectation is common in the early stages of other emerging technologies, and the industry should manage expectations appropriately. However, in quantum computing, while venture capital investment has declined significantly, the number of investments has continued to rise, reaching a record high in 2023 . This contrasts with other major emerging technologies over the same period, where venture capital has declined in both investment and volume.

On the other hand, with the exception of venture capital, which is subject to changes in the global economic and social environment, major investors such as governments, public funds and powerful enterprises have not relaxed their investment activities. Quantum computing technology has been called "strategic sovereignty technology", and competition among major countries and regions is intensifying as a key technology of the future. In 2023, major governments, including the United States, the European Union, the United Kingdom, India, and South Korea, have developed a new policy approach, including an updated roadmap, new innovation centers, and increased spending funds.
Globally, governments have pledged $40 billion to $50 billion in funding for quantum technology development (focused on quantum computing technology) as part of past spending and future initiatives . If this total is averaged over a 10-year period, government funding for quantum technologies would be about $4 billion to $5 billion per year, roughly double the peak venture capital investment ($2.5 billion in 2022). Public funding is an important resource for the development of quantum computing.

However, while public funding is important for basic R&D activities, private funding plays a more important role in applied development and commercialization.

Many technological breakthroughs accelerate the commercialization process

In fact, according to industry research, the consensus is that the decline in venture capital investment is not a quantum winter. Rather, there is increased competition among leading vendors, many technological breakthroughs, and steady progress in the commercialization process. Academia and industry are increasingly focused on the practical application of this technology, with accelerated technology development to bridge the gap between end-user expectations and the practical application of quantum computing.

(1) The Rise of Neutral Atom Systems

The presence of neutral atom quantum computers is rapidly increasing due to technological breakthroughs by leading startup companies. Atom Computing released a 1,180-qubit neutral atom system in October 2023. At the time, it was the first in the world to scale beyond 1,000 qubits . Atom achieved its initial goal of scaling to a large number of qubits, demonstrated that qubits can store quantum information for 40 seconds, and achieved a record coherence time (the amount of time a qubit can operate stably without thermal noise or other effects).

On the other hand, in an experiment led by Harvard University in close collaboration with QuEra Computing (also a Neutral Atomic Systems startup), MIT, and NIST/UMD, researchers successfully ran a large-scale algorithm on an error-corrected quantum computer with 48 logical qubits and hundreds of entangled logic operations . This is a long-awaited advance in error correction technology.

QuEra, which released a 256-qubit neutral atom system in June 2023, aims to commercialize a quantum computer with 10 logical qubits and more than 256 physical qubits by the end of 2024 using the above error-correcting technology, and also plans to release a logic qubit simulator in the first half of 2024 to help validate and evaluate the operation of quantum algorithms . It will be interesting to see if the 10-bit error-correcting quantum computer will be released by the end of 2024 as planned.

In response to Atom's success in scaling up the number of physical qubits mentioned above, QuEra has succeeded in establishing logical qubits by exploiting important error correction techniques. With the technological breakthroughs of the two companies mentioned above, neutral atom systems have joined superconducting systems and ion trap systems in the top three leading quantum computing systems. However, neither company has proposed an improvement in error rate (or fidelity) that is important for practical applications of quantum computing, so we look forward to future efforts.

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(2) Moving from quantum bits to logical qubits (virtual qubits) and improving error rates

In addition, Microsoft and Quantinuum have made significant progress toward the practical application of quantum computing technology by creating logical qubits and significantly improving error rates. By applying the Qubit Virtualization System (Microsoft's error correction technology) to the ion trap hardware (Quantinuum), Microsoft and Quantinuum were able to create 4 logical qubits from 30 physical qubits .

It was previously assumed that it takes about 1,000 physical qubits to create a single logical qubit, but the research results of Microsoft and Quantinuum have proven that it can be much less than the number of physical qubits needed to create 1 logical qubit as mentioned above. Compared to the measured circuit error rate of 8×10-3(0.008) for the experimental entangled physical qubit, the entangled logic qubit improved to 10-5 (0.00001). In other words, the error rate of these logic qubits was improved by more than 800 times compared to the physical qubits, demonstrating a highly reliable theoretical qubit.

Microsoft and Quantinuum's approach are being hailed as one that is closer to real-world application by evaluating the success of the technology breakthrough through two metrics: the number of logical qubits and the error rate. Forbes reports that Microsoft plans to use logical qubits to scale hybrid supercomputers to a level where performance limits the error rate to 1 in 100 million operations (10-8) .

In 2025, Quantinuum will introduce a new H-series quantum computer called Helios with more than 10 logical qubits, and is exploring the long-term possibility of creating a quantum machine with 1,000 logical qubits.

We look forward to both companies' efforts to implement and scale the above results.

(3) Leaders in superconducting technology development also coordinate policies

Superconductivity has long been at the forefront of the technology race for quantum computing, but rapid advances in the neutral atom and ion trap systems described above have led to fierce competition.

In December 2023, IBM released a 1,121-qubit superconducting processor (Condor), second only to Atom's 1,180-qubit neutral atom, but the newly announced next-generation System 2 will use three 133-qubit Heron processors instead of the Condor chip. This is because the error rate of the Heron chip is only 1/5 that of the Condor chip . In other words, there is more emphasis on chips with relatively low error rates than chips with large qubits.

In the future, IBM says it will focus on developing smaller chips that use a new approach called error correction. Attention is drawn to policy changes at IBM, which is focusing on "error correction" technology development (quality improvement), where practical application of the technology is indispensable from the pursuit of quantum bit number.

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Major Global Trends in Quantum Computing

As we have seen above, major changes in quantum computing will take place starting in the second half of 2022. Business leaders need to maintain a higher perspective. They should strive to understand the major global trends surrounding quantum computing. It's also crucial for them to manage expectations appropriately. Instead of getting excited and worried about individual events, they should prepare for the quantum computing age.

The following is a summary of three major global trends surrounding quantum computing.

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(1) The increasing trend of total development investment by each stakeholder will continue.

The development investment in quantum computing mainly consists of government/public funds, vendors (large companies), and venture capital. Due to the strategic nature of quantum technology, investment from governments and public funds is increasing, making it the most important backbone. Most Western and emerging market governments are announcing new initiatives and increasing investment commitments. Vendors (large companies) are divided into aggressive companies (mainly US companies) and large companies that are restructuring business and adjusting investment direction (mainly Chinese companies). The total amount of VC investment, which is sensitive to return on investment considerations and changes in the market environment, has declined, but this impact is mainly due to a significant decline in the United States, which accounts for more than 50% of VC investment in quantum technology. Investment in the EMEA region grew 3%.

In addition, IDC estimates that the compound annual growth rate (CAGR) (2023-2027) of total development investment by each stakeholder will reach 11.5% . Therefore, user companies need to manage their expectations for quantum computing appropriately and prepare for the arrival of a new quantum era without worrying about a single event.

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(2) From a development perspective, the priority is to produce highly reliable logic qubits for early practical application.

The main goal of hardware development to date has been to increase the number of physical qubits. However, qubits are inherently noisy (error-prone), and simply increasing the number of physical qubits with high error rates limits the usefulness and practicality of quantum computers. Therefore, in order to realize the early practical application of general-purpose quantum computers, a consensus has been reached that priority should be given to error correction technology that ensures practical and reliable logic qubits with few physical qubits.

As mentioned above, Microsoft and Quantinuum have created 4 logical qubits out of 30 physical qubits, but they aim to create more than 10 logical qubits by 2025 (it is estimated that they will need about 75 physical qubits). QuEra also plans to create 10 logical qubits from 256 physical qubits by the end of 2024. As noted above, large vendors such as IBM are also making policy adjustments to prioritize the development of "error correction" technologies.

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(3) Neither the technology method nor the vendor can determine the ultimate winner of the competition.

Unlike classical computers, there are many hardware components that make up qubits. Development is progressing, with the superconducting and ion trap systems leading the way so far, and the success of Atom and QuEra has shown that neutral atoms are also a promising technology. On the other hand, while large, resource-rich vendors have led the development of quantum computing, startups such as Atom, QuEra, and Quantinuum have also emerged in the field of high-performance quantum computing. Thus, at this stage, neither the technology system nor the vendor can determine the ultimate winner of the competition.

We need to keep our antennae carefully tuned to the various technologies and quantum computing ecosystems.

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For detailed insights on quantum computing, please refer to Fujitsu's insight paper.

"Transformative Quantum Computing : Striving for Greater Heights in Pursuit of Steady Progress”

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Main references

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Nature News (04 December 2023) "IBM releases first-ever 1,000-qubit quantum chip"

Dr. Jianmin Jin (Ph.D in International Economic Law)
Chief Digital Economist Fujitsu Ltd.
Senior Director
Marketing Promotion Office

2020 Fujitsu Ltd., Chief Digital Economist. 1998 Fujitsu Research Institute, Senior Fellow.
Dr. Jin's research mainly focuses on global economic, digital innovation/digital transformation, and Dr. Jin has published books such as ”Towards the Creation of a Japan’s Silicon Valley”(2020), etc.

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