One of the philosophies that we practice at the Quantum Computing Report by GQI is to serve as a low pass filter to calm down high frequency reactions oscillating between irrational exuberance and extreme pessimism regarding the future of quantum technology. There has been a lot of that recently with Google’s announcement of their progress with the Willow chip versus the recent statement by Jensen Huang, NVIDIA CEO, regarding his view on the future trajectory of quantum computing. Our assessment is that in both cases the stock market has been overreacting.
So to start off, we think it is useful to examine how NVIDIA itself grew. The company was founded in 1993 and some people will occasionally call it, the overnight success that took 30 years in the making. It is helpful to review the revenue trajectory of NVIDIA since it went public in 1999 as shown below. It is quite possible that Jensen Huang’s experience here has colored his thinking about quantum.
Although the absolute numbers will be different, there is a good chance that the shape of a quantum market curve will be similar for quantum computing in the coming decades.
Specifically, what Jensen Huang said was that he believes quantum computing is still 15 to 30 years away from being truly useful. “Truly Useful” is a very nebulous term and can mean a lot of different things to different people. We believe that he made the statement in the context of the size of the quantum computing market in comparison to the overall computing market. But, that is not to say that quantum computing revenue will be negligible. In fact, it may be quite significant, but still not a dominating factor when one looks at it in comparison to the overall computing market.
Another way to look at this is by thinking about the adoption rate for quantum computing. And to get a sense of what that might be, let’s look at the adoption rates for other technology products over the last century.
One conclusion that you can draw from this chart is that the adoption rate as measured from the time it takes to go from 10% adoption to 80% adoption has sped up over the past twenty years. Whereas it took the telephone about 65 years to go from 10% to 80%, color TV adoption took about 15 years, and smartphones about 6 years. We can attribute this increase to the improved communications available now versus in the past. Using the tools of social media and the internet more people have access to both send and receive information worldwide in a fraction of a second, but the cost to do it is dramatically less. So the discussion of the benefits and pitfalls of any new technology can be discussed and promoted with a worldwide audience in a very short time.
So what’s the bottom line? Will useful quantum computing be 15 to 30 years off? Or will we see useful quantum computers in the next few years. Our belief is that either one could be true depending upon how one defines “truly useful”. One should not underestimate the innovativeness of the scientists, engineers, and programmers working today on quantum technology. Many times, researchers like these will come up with solutions to problems that were thought to be impossible and show that the naysayers were not correct.
So what does this mean for investors in quantum technology. Our advice is to think long term. Those who are making an investment and think they can flip it in a year or two at a large profit, will be disappointed. The quantum technology is difficult, but the industry is making steady progress and we are starting to see a trickle of commercial applications from early adopters start to come out. The numbers will be small at first, but will steadily grow.
For those who want to read more about this, we will refer you to an article we wrote four years ago titled A Quantum Advantage Demonstration Will Not Kick Off a Hockey Stick Adoption Rate. that discusses the challenges one might face in providing a quantum solution that is better than a classical one and the characteristics of those problems and algorithms that might be able to do it.
January 11, 2025
Leave A Comment