Last November, IBM launched its 127-qubit Eagle, surpassing Chinas 113-qubit Jiuzhang to become the worlds fastest quantum computer. Now, China risks falling further behind in the quantum computing race as the United States reportedly weighs new export controls on the game-changing technology.

The new ban, if implemented, would target quantum computing, artificial intelligence software and other emerging technologies that could have security implications vis-a-vis China. The ban would mark a next salvo on the Biden administrations October 7 move to block high-end chips and advanced chip-making equipment exports to China.

Bloomberg reported that US industry experts are now weighing in on the potential parameters of the restrictions, which are still preliminary, and that US allies are being consulted. Analysts say any such ban would further antagonize China, which strongly protested the October 7 bans, and could put the two rivals on a dangerous collision course.

Chinese media commentators say the US aims to strengthen efforts to slow Chinas development in emerging technologies, where the two strategic rivals are racing to lead the way. The commentators suspect the US will not only aim to block China from obtaining key quantum computing parts and software but also force other countries to uphold the bans.

The US is making no secret of how it views the emerging and sensitive technology.

US National Security Advisor Jake Sullivan said ina speech last monthon technology, competitiveness and national security that computing-related technologies, including microelectronics, quantum information systems and artificial intelligence as among developments set to play an outsized importance over the coming decade. He also noted the importance of export controls to maintain as large of a lead as possible over rivals.

Currently, Alphabets Google, Intel, Microsoft and IBM are all investing heavily in quantum computing projects. Other major players in the sector include US-based IonQ and Japans Fujitsu Ltd.

Quantum computers mark, well, a quantum leap over the speed and power of current supercomputers.

That means they will likely be able to crack and bypass the encryption technologies used to secure current computer communications. More broadly, the technology is expected to unleash waves of new innovation that will revolutionize industry, communications and, crucially, defense.

On September 15, US President Joe Biden signed an executive order urging the US Treasury DepartmentsCommittee on Foreign Investment into the US (CFIUS) to ensure more robust consideration of evolving national security risks.

What may otherwise appear to be an economic transaction undertaken for commercial purposes may actually present an unacceptable risk to US national security when conducted with foreign adversaries or countries of special concern, according to the Executive Order.

It said the committee should consider the transactions effect on US supply chain resilience and national security across the microelectronics, AI, biotechnology and quantum computing sectors.

The Biden administration is now working on an outbound investment review mechanism that would scrutinize money heading to certain Chinese technologies, and new quantum computing and artificial intelligence controls could be included, according to an anonymous source quoted by Bloomberg.

Biden has said the new curbs unveiled by the US Commerce Departments Bureau of Industry and Security (BIS) on October 7 have already successfully blocked Chinas access to key US chip technologies. Thecurbshave also limited how US citizens and residents are allowed to work and collaborate with Chinese tech firms.

Secrss.com, a Shanghai-based research institute, noted in several articles this year that quantum computing can be applied in computing, communication, navigation, power and military defense industries. It said quantum computing had the potential to change the results of future wars.

One article said quantum computers can be used to initiate cyber warfare by decoding passwords and bypassing encryption used on current digital computers. It said quantum computing technologies can also be used to navigate drones and submarines.

Another article, citing a report in the European Physical Journal, said a quantum radar would be launched one day and used in space war.

China is making strong progress in the field in the current open trading environment. The 66-qubit Zuchongzhi 2, for instance, is reportedly 10 million times faster than Googles 55-qubit Sycamore.

In December 2020, a University of Science and Technology of China research team led by scientist Pan Jianwei launched Jiuzhang, a light-based or photonics quantum computer that can work at room temperature. It is said to be 10 billion times faster than Googles Sycamore.

In May 2021, Pan and his team launched Zuchongzhi 2, a superconducting quantum computer that needs to work at a temperature close to absolute zero. Jiuzhang and Zuchongzhi 2s details were published last November by the Physical Review Letters, a scientific journal of the American Physical Society.

Soon thereafter, IBMs Eagle surpassed Zuchongzhi 2 to become the worlds fastest superconducting quantum machine, underscoring the two sides budding rivalry in the filed.

Read: New US chip ban takes tech war to dire next level

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US mulling bans to stunt Chinas quantum computing

High-performance computing and quantum technologies move to the forefront of sustainable energy solutions  IT World Canada

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High-performance computing and quantum technologies move to the forefront of sustainable energy solutions - IT World Canada

Accelerating advances in quantum computingare serving as powerful reminders that the technology is rapidly advancing toward commercial viability. In just the past few months, for example, a research center in Japan announced a breakthrough in entangling qubits (the basic unit of information in quantum, akin to bits in conventional computers) that could improve error correction in quantum systems and potentially make large-scale quantum computers possible. And one company in Australia has developed software that has shown in experiments to improve the performance of any quantum-computing hardware.

As breakthroughs accelerate, investment dollars are pouring in, and quantum-computing start-ups are proliferating. Major technology companies continue to develop their quantum capabilities as well: companies such as Alibaba, Amazon, IBM, Google, and Microsoft have already launched commercial quantum-computing cloud services.

Of course, all this activity does not necessarily translate into commercial results. While quantum computing promises to help businesses solve problems that are beyond the reach and speed of conventional high-performance computers, use cases are largely experimental and hypothetical at this early stage. Indeed, experts are still debating the most foundational topics for the field (for more on these open questions, see sidebar, Debates in quantum computing).

Still, the activity suggests that chief information officers and other leaders who have been keeping an eye out for quantum-computing news can no longer be mere bystanders. Leaders should start to formulate their quantum-computing strategies, especially in industries, such as pharmaceuticals, that may reap the early benefits of commercial quantum computing. Change may come as early as 2030, as several companies predict they will launch usable quantum systems by that time.

To help leaders start planning, we conducted extensive research and interviewed 47 experts around the globe about quantum hardware, software, and applications; the emerging quantum-computing ecosystem; possible business use cases; and the most important drivers of the quantum-computing market. In the report Quantum computing: An emerging ecosystem and industry use cases, we discuss the evolution of the quantum-computing industry and dive into the technologys possible commercial uses in pharmaceuticals, chemicals, automotive, and financefields that may derive significant value from quantum computing in the near term. We then outline a path forward and how industry decision makers can start their efforts in quantum computing.

An ecosystem that can sustain a quantum-computing industry has begun to unfold. Our research indicates that the value at stake for quantum-computing players is nearly $80 billion (not to be confused with the value that quantum-computing use cases could generate).

Because quantum computing is still a young field, the majority of funding for basic research in the area still comes from public sources (Exhibit 1).

Exhibit 1

However, private funding is increasing rapidly. In 2021 alone, announced investments in quantum-computing start-ups have surpassed $1.7 billion, more than double the amount raised in 2020 (Exhibit 2). We expect private funding to continue increasing significantly as quantum-computing commercialization gains traction.

Exhibit 2

Hardware is a significant bottleneck in the ecosystem. The challenge is both technical and structural. First, there is the matter of scaling the number of qubits in a quantum computer while achieving a sufficient level of qubit quality. Hardware also has a high barrier to entry because it requires a rare combination of capital, experience in experimental and theoretical quantum physics, and deep knowledgeespecially domain knowledge of the relevant options for implementation.

Multiple quantum-computing hardware platforms are under development. The most important milestone will be the achievement of fully error-corrected, fault-tolerant quantum computing, without which a quantum computer cannot provide exact, mathematically accurate results (Exhibit 3).

Exhibit 3

Experts disagree on whether quantum computers can create significant business value before they are fully fault tolerant. However, many say that imperfect fault tolerance does not necessarily make quantum-computing systems unusable.

When might we reach fault tolerance? Most hardware players are hesitant to reveal their development road maps, but a few have publicly shared their plans. Five manufacturers have announced plans to have fault-tolerant quantum-computing hardware by 2030. If this timeline holds, the industry will likely establish a clear quantum advantage for many use cases by then.

The number of software-focused start-ups is increasing faster than any other segment of the quantum-computing value chain. In software, industry participants currently offer customized services and aim to develop turnkey services when the industry is more mature. As quantum-computing software continues to develop, organizations will be able to upgrade their software tools and eventually use fully quantum tools. In the meantime, quantum computing requires a new programming paradigmand software stack. To build communities of developers around their offerings, the larger industry participants often provide their software-development kits free of charge.

In the end, cloud-based quantum-computing services may become the most valuable part of the ecosystem and can create outsize rewards to those who control them. Most providers of cloud-computing services now offer access to quantum computers on their platforms, which allows potential users to experiment with the technology. Since personal or mobile quantum computing is unlikely this decade, the cloud may be the main way for early users to experience the technology until the larger ecosystem matures.

Most known use cases fit into four archetypes: quantum simulation, quantum linear algebra for AI and machine learning, quantum optimization and search, and quantum factorization. We describe these fully in the report, as well as outline questions leaders should consider as they evaluate potential use cases.

We focus on potential use cases in a few industries that research suggests could reap the greatest short-term benefits from the technology: pharmaceuticals, chemicals, automotive, and finance. Collectively (and conservatively), the value at stake for these industries could be between roughly $300 billion and $700 billion (Exhibit 4).

Exhibit 4

Quantum computing has the potential to revolutionize the research and development of molecular structures in the biopharmaceuticals industry as well as provide value in production and further down the value chain. In R&D, for example, new drugs take an average of $2 billion and more than ten years to reach the market after discovery. Quantum computing could make R&D dramatically faster and more targeted and precise by making target identification, drug design, and toxicity testing less dependent on trial and error and therefore more efficient. A faster R&D timeline could get products to the right patients more quickly and more efficientlyin short, it would improve more patients quality of life. Production, logistics, and supply chain could also benefit from quantum computing. While it is difficult to estimate how much revenue or patient impact such advances could create, in a $1.5 trillion industry with average margins in earnings before interest and taxes (EBIT) of 16 percent (by our calculations), even a 1 to 5 percent revenue increase would result in $15 billion to $75 billion of additional revenues and $2 billion to $12 billion in EBIT.

Quantum computing can improve R&D, production, and supply-chain optimization in chemicals. Consider that quantum computing can be used in production to improve catalyst designs. New and improved catalysts, for example, could enable energy savings on existing production processesa single catalyst can produce up to 15 percent in efficiency gainsand innovative catalysts may enable the replacement of petrochemicals by more sustainable feedstock or the breakdown of carbon for CO2 usage. In the context of the chemicals industry, which spends $800 billion on production every year (half of which relies on catalysis), a realistic 5 to 10 percent efficiency gain would mean a gain of $20 billion to $40 billion in value.

The automotive industry can benefit from quantum computing in its R&D, product design, supply-chain management, production, and mobility and traffic management. The technology could, for example, be applied to decrease manufacturing processrelated costs and shorten cycle times by optimizing elements such as path planning in complex multirobot processes (the path a robot follows to complete a task) including welding, gluing, and painting. Even a 2 to 5 percent productivity gainin the context of an industry that spends $500 billion per year on manufacturing costswould create $10 billion to $25 billion of value per year.

Finally, quantum-computing use cases in finance are a bit further in the future, and the advantages of possible short-term uses are speculative. However, we believe that the most promising use cases of quantum computing in finance are in portfolio and risk management. For example, efficiently quantum-optimized loan portfolios that focus on collateral could allow lenders to improve their offerings, possibly lowering interest rates and freeing up capital. It is earlyand complicatedto estimate the value potential of quantum computingenhanced collateral management, but as of 2021, the global lending market stands at $6.9 trillion, which suggests significant potential impact from quantum optimization.

In the meantime, business leaders in every sector should prepare for the maturation of quantum computing.

Until about 2030, we believe that quantum-computing use cases will have a hybrid operating model that is a cross between quantum and conventional high-performance computing. For example, conventional high-performance computers may benefit from quantum-inspired algorithms.

Beyond 2030, intense ongoing research by private companies and public institutions will remain vital to improve quantum hardware and enable moreand more complexuse cases. Six key factorsfunding, accessibility, standardization, industry consortia, talent, and digital infrastructurewill determine the technologys path to commercialization.

Leaders outside the quantum-computing industry can take five concrete steps to prepare for the maturation of quantum computing:

Leaders in every industry have an uncommon opportunity to stay alert to a generation-defining technology. Strategic insights and soaring business value could be the prize.

Excerpt from:
Quantum computing use cases--what you need to know | McKinsey