Quantum Computing Investment Boom: Funding Driving Breakthroughs

Quantum computing — that dream of taking problems and solving them in seconds — steps closer to reality by the day.

And companies, especially in the fields of cryptography, medicine, and materials science, are putting their money where their mouth is and investing.

As we explore through numbers below, the number of investments in quantum computing has surged 700% since 2015, and the average deal has risen from $0.1 billion to $1 billion.

Investment and research funds seem very aware of the new economies that quantum computing will unlock when the technology is fully out of the labs.

Table of Contents Table of Contents

1. Key Takeaways
2. Quantum Computing — The Quick Backgrounder
3. Venture Capital Trends in Quantum Computing
4. Impacts on Cryptography, Medicine, and Materials Science
5. The Bottom Line

Show Full Guide

Table of Contents

1. Key Takeaways
2. Quantum Computing — The Quick Backgrounder
3. Venture Capital Trends in Quantum Computing
Show Full Guide
4. Impacts on Cryptography, Medicine, and Materials Science
5. The Bottom Line

Quantum Computing — The Quick Backgrounder

Quantum offers advancements far beyond what classical computers can do.

Classical computers perform mathematical operations by using step-by-step algorithms to manipulate binary bits, which are either 0 or 1. The results are deterministic, which means that given the same starting conditions, the same step-by-step procedures will always produce the same outcome.

However, quantum computers use principles from quantum mechanics, working with quantum bits or qubits. Thanks to superposition, qubits can be both 0 and 1 at the same time. Qubits can also be entangled, meaning the state of one qubit can depend on the state of another, no matter how far apart they are.

Given the same starting conditions, a quantum algorithm will provide a range of possible outcomes with different probabilities rather than one certain result.

This allows quantum computers to perform complex calculations much faster than classical computers.

For example, while a classical computer might take millions of years to factor large prime numbers — a task crucial in encryption — quantum computers could do it in seconds.

Venture Capital Trends in Quantum Computing

Venture capital (VC) activity in quantum computing is growing significantly, showing strong investor confidence in this developing technology.

To draw a comparison over a longer period, let’s look at the trends from 2015 to 2023. In 2015, there were only 11 deals with a total value of $0.1 billion, according to PitchBook data.

By 2023, the number of deals had increased by over 700%, and the total deal value had grown tenfold—92 deals were recorded in 2023, with a total deal value of $1.0 billion.

Even if the average deal amount dropped between 2022 (around $1.5 billion) and 2023, the money flowing into quantum computing is staggering — making it look like the next long play in the world. Is this the next revolution after artificial intelligence?

Impacts on Cryptography, Medicine, and Materials Science

Quantum computing will have a big impact on cryptography. Classical encryption methods, like RSA, rely on the difficulty of factoring large numbers, a task quantum computers can solve much faster using Shor’s algorithm. This ability could make current encryption methods useless, putting data security at risk.

However, quantum computing also offers solutions. Quantum key distribution (QKD) uses quantum mechanics to create secure communication channels. Any attempt to eavesdrop on a quantum key changes its state, warning the communicating parties of an intruder.

For example, PacketLight Networks and Toshiba recently showcased QKD over Dense Wavelength Division Multiplexing (DWDM) links. DWDM links allow multiple data signals to be sent simultaneously over a single optical fiber, showing that quantum-secure data transmission can work on existing networks and enhance data security without needing separate fiber.

Quantum computing can significantly advance healthcare and biomedical research. One promising application is combining it with AI to improve medical research and treatments.

Case studies highlight this potential. For instance, one project launched by Cleveland Clinic, IBM, and the Hartree Centre uses quantum computing to analyze large data sets to identify molecular features that predict surgical outcomes in epilepsy patients. This aims to find new biomarkers for personalized treatments, improving patient outcomes.

Additionally, quantum computing’s ability to simulate complex quantum systems can revolutionize materials science

For example, Microsoft’s Azure Quantum Elements platform?helps chemists and material scientists discover new materials faster. It uses tools like Generative Chemistry to find novel compounds quickly and Accelerated Density Functional Theory (DFT) to simulate electronic structures 20 times faster than traditional methods.

Although currently based on quantum-inspired methods, Microsoft plans to integrate full quantum computing into the platform, making it even more powerful and accurate. Recent simulations of chemical catalysts combining classical supercomputers, AI, and logical qubits demonstrate this potential.

The Bottom Line

The surge in venture capital activity underscores the immense potential of quantum computing. With a 700% increase in deals and a tenfold growth in total investment from 2015 to 2023, it’s clear that investors see what’s lurking in Schr?dinger’s box.

Perhaps this is the decade where another sci-fi trope becomes a practical tool for everyday life.

Just watch out for Q-Day.