Season 4, Post 25: Quantifying quantum

Listen to Satya Nadella, Microsoft’s CEO and he will tell you that quantum computing is “one of the technologies that will radically reshape the world.

Season 4, Post 25: Quantifying quantum

Listen to Satya Nadella, Microsoft’s CEO and he will tell you that quantum computing is “one of the technologies that will radically reshape the world.” A McKinsey report published in June lent support to this claim, suggesting that quantum technology funding and investment activity surpassed $1.4bn in 2021, more than double that of 2020. The organisation estimates that the industry could be worth $700bn by 2035. Separating quantum hype from reality is, however, a major challenge. To this end, we spoke recently to a senior member leading the quantum efforts of a major US tech business.

Our conversation began with his observation that there was “lots of quantum-washing” currently underway – companies often labelling inaccurately their progress/ prowess regarding quantum. As it was put to us, quantum computing is “a completely different computer science” and so needs to be built bottom-up. At present, much of the technology remains immature, or “too small, too slow and too error-prone.” We were told that the logical approach was for businesses to consider constructing clear roadmaps for development which embraced both hardware and software tools.

When asked how businesses might use quantum computers, we were reminded that “quantum will not solve all problems.” However, the three most likely current broad use cases could comprise simulating nature, analysing data patterns and optimised search/ sampling. The former embraces enhanced materials analysis which could be applied to devising more efficient ways for energy extraction or the prevention of materials corrosion. Better data analysis and optimisation could help solve problems as diverse as drug discovery, more efficient logistics routing or better trading algorithms. Businesses such as Boeing and JP Morgan are already apparently working with certain quantum processes.

How might the industry evolve? Our quantum contact highlighted that the biggest current barriers to adoption related not only to effectively scaling the technology (so that it could solve increasingly complex problems) but in identifying specifically which problems quantum computers might be best at solving (rather than a one-size-fits-all approach). Have no doubt, the potential is significant, in our view, but we are still in a very early quantum innings.

21 June 2022​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​

The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.

​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​Alex Gunz, Fund Manager


The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital LLP believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital LLP, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital LLP is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital LLP disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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