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Leigh Sylvester
Leigh Sylvester

Microsoft Places Its Bets On Quantum Computing

A dozen years ago, when Freedman came to Mundie looking for backing for his quantum computing idea, Mundie said quantum computing was in a bit of a doldrums. Although physicists had been talking about the possibility of building quantum computers for years, they were struggling to create a working qubit with high enough fidelity to be useful in building a working computer.

Microsoft places its bets on quantum computing

More than 50 years after Richard Feynman first pioneered the idea of quantum computing, Mundie is now looking ahead to the quantum economy that he believes this new type of computing will create. Just like classical computing has changed virtually every aspect of society, he thinks quantum computing will eventually help fuel revolutionary changes in almost everything, starting with chemistry, materials and machine learning.

Quantum computing is still nascent, but it's already sparking a revolution in technology. We look at how Google, Microsoft, Amazon, IBM, and Intel are establishing themselves in the quantum space through product launches, R&D projects, investments, partnerships, and more.

Quantum computing is a rapidly growing field that aims to solve some of the most challenging problems that humanity faces in the 21st century. IBM estimates that a complex problem would take a normal supercomputer a week. A quantum computer? 1 second.

Major players like Amazon, IBM, and Microsoft are increasingly focusing on quantum computing as a potential solution to their most complex business puzzles. In fact, Amazon even has its own Amazon Quantum Solutions Lab.

What they do: By combining the raw power of quantum computing with machine learning software, Palo Alto based QC Ware has decided to focus on providing quantum algorithms to traditional data scientists. Forge, their signature software, is marketed as turnkey so data leaders can plug and play instead of having to manage every piece of the quantum puzzle.

What they do: Software development using quantum computing is a challenging, complex task that requires expertise that is relatively rare in the development landscape. Zapata is one of the market leaders in developing quantum software with real-world use cases across pharma, engineering, finance, and more.

What they do: Simple, easy-to-use connected platforms have dominated over the last decade. Airbnb, Uber, Amazon and others connect everyday people to complex services that usually require massive amounts of logistics. Strangeworks has built its business on a user-friendly platform that provides the power of quantum computing without the underlying complexity.

What they do: One of the core problems in quantum computing is harmonizing the interplay between hardware and software for maximum computing performance. Quantum Machines recognized this and has developed what they call their Quantum Orchestration Platform. The secret sauce is their Operator-X device which was designed specifically for quantum and powering large quantum processors.

It's certainly understandable why investors are excited about the future of quantum computing. Quantum computers are the next leap forward in computing power. Quantum computers use the power of quantum mechanics to solve certain problems that even the biggest and best classic supercomputers in the world can't solve. Quantum computers create multidimensional spaces to represent very large problems in a way classical supercomputers simply cannot. Quantum computers can even perform certain tasks in about one second that it would take a classic supercomputer a week to perform. Here are eight quantum computing stocks to buy, according to Wall Street analysts.

Microsoft Quantum, which the company calls "the world's first full-stack, open cloud quantum computing ecosystem," allows developers to build quantum applications and run them on multiple systems. In March 2022, Microsoft announced its Azure Quantum team has engineered devices that can produce quantum excitations that have been theorized by scientists but that don't normally exist in nature. Quantum computing may be a relatively small part of Microsoft's overall cloud services and software business, but Bank of America analyst Brad Sills says there are plenty of other reasons to love Microsoft, including its high-growth Azure cloud services business and its potential to expand margins in coming years. Bank of America has a "buy" rating and $345 price target for MSFT stock, which closed at $237.92 on Sept. 23.

The reason for excitement: a quantum computer has seemingly-magical properties that allow it to process exponentially more information than a conventional system. A quantum computer isn't just a much faster computer. Rather, it's an entirely different paradigm of computing that requires some radical rethinking.

Now, the race is on to be the first company to conquer the massive opportunity presented by this technology. IBM, Microsoft, Google, and other tech titans and startups alike are all placing big bets on the technology. Meanwhile, in December, the U.S. government passed the National Quantum Initiative Act, which proposes spending $1.2 billion over the next five years on labs, academia and companies to advance quantum computing technologies.

But don't expect to see quantum computers in the office anytime soon: Experts we spoke to say that despite IBM's early toehold here, it'll still be five to ten years before quantum computing really hits the mainstream. IBM Q System One is currently only available as a cloud computing service to select customers; it'll be a while before anything like it will be something that people can buy and put to work on their own terms.

A more controversial usage would be in cryptography: A quantum computer could force its way past any kind of known cypher, making it easy to decrypt even the most sensitive information. There's a strong interest in this usage from world governments, while activists worry that the advent of quantum computing could mean the end of privacy.

Since quantum computing is still in its early stages, there's a lot about it that's still just unproven hype, says Matthew Brisse, research vice president at Gartner. But already, customers are watching the space to determine if quantum computing will bring competitive business advantages, he says.

"The thing about quantum computing is you can think of it as a slowly moving train," Brian Hopkins, vice president and principal analyst at Forrester, told Business Insider. "If it's going one inch a second, a month later it's going two inches a second. Pretty soon it will be moving really quickly."

"One of the challenges in my group is manipulating the materials, the silicons, the metals so we can create a very uniform environment," said Intel's Clarke. "This is basically semiconductor engineering at its finest. The technologies we need to make quantum computing at a large scale don't exist yet."

Another catch is that quantum computers have the undeniable potential to provide unforeseen computing power. But there aren't many people in this world who actually have experience coding or managing these systems, leaving even excited would-be customers trying to figure out how to actually take advantage.

Analysts say IBM is currently leading the race in quantum computing, such as it is, thanks to the limited commercial availability of the IBM Q System One. Because it's accessed via the cloud, IBM can maintain those very particular conditions to make this quantum computer function while still letting its select customers take advantage.

"I think [IBM's quantum computer] rocks," Brisse, the analyst, said. "I think the model of quantum computing as a service is the right model. By putting it in the container and addressing some of the noise issues, they really are trying to improve the quality."

Different tech titans are taking different approaches to the problem. Intel, IBM, Google, and the quantum computing startup Rigetti are building systems designed around superconducting circuits, taking their cues from today's conventional supercomputers.

Microsoft is taking a completely different, and perhaps riskier approach, in trying to build a better qubit. The topological qubit that Microsoft is trying to build would fragment electrons to store information in multiple places at the same time, making it more stable and less prone to collapse. It's far less proven than what its rivals are trying to build, but the payoff would be a major step forward for the whole field of quantum computing, says Hopkins, the analyst.

The rising tide of quantum computing has resulted in a wave of investor interest in related startups. IBM's Sutor estimates that there are about 100 startups around the world, in quantum software, hardware, and even consulting. That's small compared to the larger startup market, but far more than there used to be.

"It's the focus of our commercial existence," Betsy Masiello, VP of product at Rigetti, told Business Insider. "There are plenty of companies that are in the quantum space that are working for software applications in quantum computing. We're manufacturing chips and we're building computing systems."

"I really believe in quantum computing although it may be longer than some originally thought before we have a generalizable quantum computer that is better than a traditional computer at solving real world problems, although we may get some announcements of interesting smaller-scale optimization problems being done in the next few years," Kinsella told Business Insider.

Some, like Microsoft Corporate VP of Quantum Todd Holmdahl, are optimistic enough to say that it could be bigger than today's push towards artificial intelligence and machine learning. He used to tell his kids that they should do what they're passionate about, but that they can always get a job in AI. Now, he'd say it about quantum computing.

"These companies [also including Apple, Microsoft and] have come to dominate new developments in mobile, public cloud and big data analytics, as well as emerging areas such as artificial intelligence, virtual/augmented reality and even quantum computing" says Argus Research analyst Joseph Bonner (Buy).




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