The quantum computing sector currently sees a surge in optimistic announcements. Two years ago, the expectation was that quantum computing hype would falter in 2024.
Instead, the opposite has occurred. Companies like the UK-based Quantum Motion claim to have the first full-stack quantum computer, touting scalable technology ready for mass production, capable of scaling to a million qubits—a rough estimate for commercial relevance.
Other firms, such as PsiQuantum, which uses photons as qubits, announced factory construction last year, and both Chinese and Japanese companies, including Fujitsu, are also building quantum computing capabilities, with Fujitsu claiming a 250 logical qubit machine. This flurry of activity contributes to a perception of rapid advancement and growing investment appeal.
However, these claims often mask fundamental challenges. The most well-understood approach, superconducting circuits—used by industry giants like IBM, Google, and Amazon—requires qubits to operate at extreme temperatures, typically some millikelvin.
While demonstrations have reached roughly 100 qubits with high precision, scaling beyond approximately 1,000 qubits introduces a critical problem: the more qubits manipulated, the more heat generated, overwhelming current cooling systems. This suggests that mass-producing functional, large-scale quantum computers capable of solving complex problems remains an unsolved engineering feat, as Sabine Hossenfelder points out, cautioning that many announcements are akin to claiming “we can mass-produce spaceships. It’s just that they don’t fly.”
Attempts, like IBM’s announcement a few years back to build the world’s largest super fridge, have yet to materialize into public breakthroughs. For deeper insights into these distinctions, consider exploring How Is Quantum Computing Different From Classical Computing?.
The State of Quantum Computing Investment and Realities
Public markets reflect this speculative fervor. Companies like IonQ, Rigetti, and D-Wave have seen significant stock gains in recent months.
BlackRock is even developing a quantum computing ETF, signaling institutional interest in this emerging sector. Government entities, including the US government, and financial giants like JPMorgan have also announced investments into quantum technology.
However, many commercial claims, such as IBM’s headline about quantum-enabled algorithmic trading, are often criticized by experts like computer scientist Scott Aaronson, who dismissed one such paper by noting, “It’s not quite shooting fish in a barrel, because the fish are already dead before we’ve reached the end of the abstract.” Such statements suggest the “quantum part isn’t actually necessary” for the claimed applications, serving more as marketing than a genuine technological advancement.
Despite these optimistic headlines about quantum computers helping train scheduling or discovering proteins, the underlying reality is that none of these companies are even remotely profitable. This points to a significant disconnect between market enthusiasm and actual commercial returns.
The surge in investment is potentially driven by confidential technological breakthroughs, or more likely, by intense government competition, particularly from the US military concerned about Chinese advancements, coupled with insufficient clarification from scientists regarding the technology’s true capabilities and limitations. To understand the commercial field, read What Quantum Computing Companies Are Building Now.
The Bottom Line
While the potential of quantum computing remains enormous for specialized applications, the current investment climate is characterized by significant hype. The technical challenges of scalability, cooling, and error correction for truly powerful machines are far from resolved.
Investors should approach quantum computing with extreme caution, recognizing that current market optimism largely outpaces the demonstrated commercial viability and profitability of the underlying technology. For most investors, the sector remains a high-risk, long-term bet on unproven technology rather than a sound short-term investment opportunity.
