Category Archives: Quantum Computing

Perhaps the most famously weird feature of quantum mechanics is nonlocality: Measure one particle in an entangled pair whose partner is miles away, and the measurement seems to rip through the intervening space to instantaneously affect its partner. This spooky action at a distance (as Albert Einstein called it) has been the main focus of tests of quantum theory.

Nonlocality is spectacular. I mean, its like magic, said Adn Cabello, a physicist at the University of Seville in Spain.

But Cabello and others are interested in investigating a lesser-known but equally magical aspect of quantum mechanics: contextuality. Contextuality says that properties of particles, such as their position or polarization, exist only within the context of a measurement. Instead of thinking of particles properties as having fixed values, consider them more like words in language, whose meanings can change depending on the context: Timeflies likean arrow. Fruitflies likebananas.

Although contextuality has lived in nonlocalitys shadow for over 50 years, quantum physicists now consider it more of a hallmark feature of quantum systems than nonlocality is. A single particle, for instance, is a quantum system in which you cannot even think about nonlocality, since the particle is only in one location, said Brbara Amaral, a physicist at the University of So Paulo in Brazil. So [contextuality] is more general in some sense, and I think this is important to really understand the power of quantum systems and to go deeper into why quantum theory is the way it is.

Researchers have also found tantalizing links between contextuality and problems that quantum computers can efficiently solve that ordinary computers cannot; investigating these links could help guide researchers in developing new quantum computing approaches and algorithms.

And with renewed theoretical interest comes a renewed experimental effort to prove that our world is indeed contextual. In February, Cabello, in collaboration with Kihwan Kim at Tsinghua University in Beijing, China, published a paper in which they claimed to have performed the first loophole-free experimental test of contextuality.

The Northern Irish physicist John Stewart Bell is widely credited with showing that quantum systems can be nonlocal. By comparing the outcomes of measurements of two entangled particles, he showed with his eponymous theorem of 1965 that the high degree of correlations between the particles cant possibly be explained in terms of local hidden variables defining each ones separate properties. The information contained in the entangled pair must be shared nonlocally between the particles.

Bell also proved a similar theorem about contextuality. He and, separately, Simon Kochen and Ernst Specker showed that it is impossible for a quantum system to have hidden variables that define the values of all their properties in all possible contexts.

In Kochen and Speckers version of the proof, they considered a single particle with a quantum property called spin, which has both a magnitude and a direction. Measuring the spins magnitude along any direction always results in one of two outcomes: 1 or 0. The researchers then asked: Is it possible that the particle secretly knows what the result of every possible measurement will be before it is measured? In other words, could they assign a fixed value a hidden variable to all outcomes of all possible measurements at once?

Quantum theory says that the magnitudes of the spins along three perpendicular directions must obey the 101 rule: The outcomes of two of the measurements must be 1 and the other must be 0. Kochen and Specker used this rule to arrive at a contradiction. First, they assumed that each particle had a fixed, intrinsic value for each direction of spin. They then conducted a hypothetical spin measurement along some unique direction, assigning either 0 or 1 to the outcome. They then repeatedly rotated the direction of their hypothetical measurement and measured again, each time either freely assigning a value to the outcome or deducing what the value must be in order to satisfy the 101 rule together with directions they had previously considered.

They continued until, in the 117th direction, the contradiction cropped up. While they had previously assigned a value of 0 to the spin along this direction, the 101 rule was now dictating that the spin must be 1. The outcome of a measurement could not possibly return both 0 and 1. So the physicists concluded that there is no way a particle can have fixed hidden variables that remain the same regardless of context.

While the proof indicated that quantum theory demands contextuality, there was no way to actually demonstrate this through 117 simultaneous measurements of a single particle. Physicists have since devised more practical, experimentally implementable versions of the original Bell-Kochen-Specker theorem involving multiple entangled particles, where a particular measurement on one particle defines a context for the others.

In 2009, contextuality, a seemingly esoteric aspect of the underlying fabric of reality, got a direct application: One of the simplified versions of the original Bell-Kochen-Specker theorem was shown to be equivalent to a basic quantum computation.

The proof, named Mermins star after its originator, David Mermin, considered various combinations of contextual measurements that could be made on three entangled quantum bits, or qubits. The logic of how earlier measurements shape the outcomes of later measurements has become the basis for an approach called measurement-based quantum computing. The discovery suggested that contextuality might be key to why quantum computers can solve certain problems faster than classical computers an advantage that researchers have struggled mightily to understand.

Robert Raussendorf, a physicist at the University of British Columbia and a pioneer of measurement-based quantum computing, showed that contextuality is necessary for a quantum computer to beat a classical computer at some tasks, but he doesnt think its the whole story. Whether contextuality powers quantum computers is probably not exactly the right the question to ask, he said. But we need to get there question by question. So we ask a question that we understand how to ask; we get an answer. We ask the next question.

Some researchers have suggested loopholes around Bell, Kochen and Speckers conclusion that the world is contextual. They argue that context-independent hidden variables havent been conclusively ruled out.

In February, Cabello and Kim announced that they had closed every plausible loophole by performing a loophole free Bell-Kochen-Specker experiment.

The experiment entailed measuring the spins of two entangled trapped ions in various directions, where the choice of measurement on one ion defined the context for the other ion. The physicists showed that, although making a measurement on one ion does not physically affect the other, it changes the context and hence the outcome of the second ions measurement.

Skeptics would ask: How can you be certain that the context created by the first measurement is what changed the second measurement outcome, rather than other conditions that might vary from experiment to experiment? Cabello and Kim closed this sharpness loophole by performing thousands of sets of measurements and showing that the outcomes dont change if the context doesnt. After ruling out this and other loopholes, they concluded that the only reasonable explanation for their results is contextuality.

Cabello and others think that these experiments could be used in the future to test the level of contextuality and hence, the power of quantum computing devices.

If you want to really understand how the world is working, said Cabello, you really need to go into the detail of quantum contextuality.

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The Spooky Quantum Phenomenon You've Never Heard Of - Quanta Magazine

Flashes of what may become a transformative new technology are coursing through a network of optic fibers under Chicago.

Researchers have created one of the worlds largest networks for sharing quantum information a field of science that depends on paradoxes so strange that Albert Einstein didnt believe them.

The network, which connects the University of Chicago with Argonne National Laboratory in Lemont, is a rudimentary version of what scientists hope someday to become the internet of the future. For now, its opened up to businesses and researchers to test fundamentals of quantum information sharing.

The network was announced this week by the Chicago Quantum Exchange which also involves Fermi National Accelerator Laboratory, Northwestern University, the University of Illinois and the University of Wisconsin.

With a $500 million federal investment in recent years and $200 million from the state, Chicago, Urbana-Champaign, and Madison form a leading region for quantum information research.

Why does this matter to the average person? Because quantum information has the potential to help crack currently unsolvable problems, both threaten and protect private information, and lead to breakthroughs in agriculture, medicine and climate change.

While classical computing uses bits of information containing either a 1 or zero, quantum bits, or qubits, are like a coin flipped in the air they contain both a 1 and zero, to be determined once its observed.

That quality of being in two or more states at once, called superposition, is one of the many paradoxes of quantum mechanics how particles behave at the atomic and subatomic level. Its also a potentially crucial advantage, because it can handle exponentially more complex problems.

Another key aspect is the property of entanglement, in which qubits separated by great distances can still be correlated, so a measurement in one place reveals a measurement far away.

The newly expanded Chicago network, created in collaboration with Toshiba, distributes particles of light, called photons. Trying to intercept the photons destroys them and the information they contain making it far more difficult to hack.

The new network allows researchers to push the boundaries of what is currently possible, said University of Chicago professor David Awschalom, director of the Chicago Quantum Exchange.

However, researchers must solve many practical problems before large-scale quantum computing and networking are possible.

For instance, researchers at Argonne are working on creating a foundry where dependable qubits could be forged. One example is a diamond membrane with tiny pockets to hold and process qubits of information. Researchers at Argonne also have created a qubit by freezing neon to hold a single electron.

Because quantum phenomena are extremely sensitive to any disturbance, they might also be used as tiny sensors for medical or other applications but theyd also have to be made more durable.

The quantum network was launched at Argonne in 2020, but has now expanded to Hyde Park and opened for use by businesses and researchers to test new communication devices, security protocols and algorithms. Any venture that depends on secure information, such as banks financial records of hospital medical records, would potentially use such a system.

Quantum computers, while in development now, may someday be able to perform far more complex calculations than current computers, such as folding proteins, which could be useful in developing drugs to treat diseases such as Alzheimers.

In addition to driving research, the quantum field is stimulating economic development in the region. A hardware company, EeroQ, announced in January that its moving its headquarters to Chicago. Another local software company, Super.tech, was recently acquired, and several others are starting up in the region.

Because quantum computing could be used to hack into traditional encryption, it has also attracted the bipartisan attention of federal lawmakers. The National Quantum Initiative Act was signed into law by President Donald Trump in 2018 to accelerate quantum development for national security purposes.

In May, President Joe Biden directed federal agency to migrate to quantum-resistant cryptography on its most critical defense and intelligence systems.

Ironically, basic mathematical problems, such as 5+5=10, are somewhat difficult through quantum computing. Quantum information is likely to be used for high-end applications, while classical computing will likely continue to be practical for many daily uses.

Renowned physicist Einstein famously scoffed at the paradoxes and uncertainties of quantum mechanics, saying that God does not play dice with the universe. But quantum theories have been proven correct in applications from nuclear energy to MRIs.

Stephen Gray, senior scientist at Argonne, who works on algorithms to run on quantum computers, said quantum work is very difficult, and that no one understands it fully.

But there have been significant developments in the field over the past 30 years, leading to what some scientists jokingly called Quantum 2.0, with practical advances expected over the next decade.

Were betting in the next five to 10 years therell be a true quantum advantage (over classical computing), Gray said. Were not there yet. Some naysayers shake their canes and say its never going to happen. But were positive.

Just as early work on conventional computers eventually led to cellphones, its hard to predict where quantum research will lead, said Brian DeMarco, professor of physics at the University of Illinois at Urbana-Champaign, who works with the Chicago Quantum Exchange.

Thats why its an exciting time, he said. The most important applications are yet to be discovered.

See more here:

Chicago Quantum Exchange takes first steps toward a future that could revolutionize computing, medicine and cybersecurity - Finger Lakes Times

Technology is always changing and we can expect all sorts of new initiatives to take place in the next five years that will change how we live. Below are some of the most interesting technology trends we see coming in the next several years.

We have been reading a great deal about the software development of the Metaverse and what the new Facebook initiative could look like in a few years. While it isnt yet possible to live in the Metaverse, we think in five years, it will possible to fully immerse yourself there.

Right now, the Metaverse is where the World Wide Web was in the mid-90s. Many people believe once it advances and improves, the Metaverse will have a revolutionary impact on us like the Internet did. Its expected this will forever change how we socialize, work, and live, and organizations that dont adapt to the Metaverse will be wiped out.

The big driver of the Metaverse experience is gaming. As the Metaverses technical capabilities grow, more games will be available there that completely immerse you in the experience. And that life-changing experience is what will make people move to the Metaverse.

We could eventually get to the point where people live most of their lives in the Metaverse.

One of the major concerns for many organizations today is the lag that can affect how operations are managed. That is why many industries are concentrating on how efficient and responsive computers are so data can be analyzed as quickly as possible. This is where edge computing comes into the picture.

Edge computing brings computer processes and data storage closer to organizations and reduces response times and lowers the amount of bandwidth used.

Some advantages of edge computing that we will see in the future are:

Many people think drones will be much more common by 2024 and 2025. Right now, drones are mainly used only by videographers and photographers. But soon, drones will be cheap enough that a lot of people will want to own them. And with improved technology, they will be able to be flown for many hours at a time without a recharge.

Drones also will not require permission from the government in the next few years, so they could be used for more things. For instance, drones may be used more to find people or animals that are lost. There also could be more use of drones to deliver consumer goods.

There will be a time soon when none of us can go through a day without seeing a drone.

Many of us only think about blockchain technology in terms of cryptocurrencies such as Ethereum and Bitcoin. However, blockchain offers many types of security that are beneficial in other areas.

Blockchain is data that only can be added to and cannot be taken from or changed. Because the data cannot be changed, it makes it extremely secure. Also, blockchain is driven by consensus so no one person or organization controls the data. Blockchain means there isnt a third-party gatekeeper keeping control of the transactions.

Artificial intelligence will grow by leaps and bounds in the next few years. Recently, the idea of AI has advanced as researchers and scientists have found more innovative ways to use the tech.

We think one area that will expand rapidly for AI is healthcare. With the development of artificial neural networks and advanced deep learning, medical professionals will be able to do intellectual tasks a lot faster.

Further, AI in the medical field will help doctors to leverage data to notice patterns that can make the delivery of healthcare a more personal experience. Healthcare could see major changes because of AI with healthcare professionals spending more of their time working with the patient rather than understanding the diagnosis.

Cloud computing will only get bigger in the coming years as more organizations large and small put their data in the cloud and stop relying on local servers. We can expect a large transition to cloud computing in the next five years in many organizations, businesses, and industries.

There also will be more advances in alternatives to cloud computing, including edge computing (which we detail on this list) and fog computing. Fog computing bypasses the challenges with cloud computing not being able to process massive amounts of data in a short time.

Fog computing moves every function the networks edge so speeds are much faster.

RPA, like machine learning and AI, is another emerging technology that will automate many jobs. RPA involves the use of software to automate routine business processes including processing technologies, interpreting applications, manipulating data, and even answering texts and emails. RPA will essentially automate common tasks that people once did by hand.

Some sources estimate that robotic process automation will threaten the jobs of more than 200 million people and up to 9% of the workforce around the globe. RPA, however, also will create new jobs, and it is believed that most jobs can only be partially automated, not entirely replaced.

Tech professionals who want to learn the ins and outs of RPA will find jobs as RPA developers, analysts, and architects.

No list of emerging tech trends is ever complete without talking about 5G. This is the new generation standard in mobile comms that offers faster speeds and reduced latency. This is great news because so many of us use our phones all the time to live our busy lives.

Of course, 5G networks have been developed for many years. But now the networks are starting to go online and 5G is offering much faster speeds on mobile devices and Internet connections are more reliable.

With so much more wireless bandwidth available, its not possible for more IoT devices to connect with each other. There also will be more possibilities in the future for self-driving vehicles and even smart cities. All of these things will be made possible by much faster wireless data transfers with 5G networks.

Quantum computing is a type of computing that uses quantum principles including quantum entanglement and superposition. This intriguing trend in technology is also part of preventing the spread of viruses and developing new vaccines. These things are possible with quantum computing because of the ease of monitoring, querying, and acting on data, no matter the source.

Quantum computing also should be of use in the future in finance and banking to reduce credit risk and detect fraud.

Quantum computers are now much faster than conventional computers and large brands of computers are now making significant advances in quantum computing.

This list of technology trends in the next several years shows how much technology changes in a short time. While all of these technologies are still relatively early in their lifecycles, we can expect that they will continue to improve and evolve in the next five years.

By the time another five years passes, its hard to imagine how much more advanced technology will be but we are sure it will be impressive!

Nate Nead is the CEO & Managing Member of Nead, LLC, a consulting company that provides strategic advisory services across multiple disciplines including finance, marketing and software development. For over a decade Nate had provided strategic guidance on M&A, capital procurement, technology and marketing solutions for some of the most well-known online brands. He and his team advise Fortune 500 and SMB clients alike. The team is based in Seattle, Washington; El Paso, Texas and West Palm Beach, Florida.

Original post:

Top 9 Technology Trends In The Next 5 Years - ReadWrite

NATIONAL SECURITY MEMORANDUM/NSM-10

MEMORANDUM FOR THE VICE PRESIDENT

THE SECRETARY OF STATE

THE SECRETARY OF THE TREASURY

THE SECRETARY OF DEFENSE

THE ATTORNEY GENERAL

THE SECRETARY OF COMMERCE

THE SECRETARY OF ENERGY

THE SECRETARY OF HOMELAND SECURITY

THE ASSISTANT TO THE PRESIDENT AND CHIEF OF STAFF

THE DIRECTOR OF THE OFFICE OF MANAGEMENT BUDGET

THE DIRECTOR OF NATIONAL INTELLIGENCE

THE DIRECTOR OF THE CENTRAL INTELLIGENCE AGENCY

THE ASSISTANT TO THE PRESIDENT FOR NATIONAL

SECURITY AFFAIRS

THE COUNSEL TO THE PRESIDENT

THE ASSISTANT TO THE PRESIDENT FOR ECONOMIC

POLICY AND DIRECTOR OF THE NATIONAL ECONOMIC

COUNCIL

THE DIRECTOR OF THE OFFICE OF SCIENCE AND

TECHNOLOGY POLICY

THE NATIONAL CYBER DIRECTOR

THE CHAIRMAN OF THE JOINT CHIEFS OF STAFF

THE DIRECTOR OF THE FEDERAL BUREAU OF

INVESTIGATION

THE DIRECTOR OF THE NATIONAL SECURITY AGENCY

THE DIRECTOR OF THE NATIONAL INSTITUTE OF

STANDARDS AND TECHNOLOGY

THE DIRECTOR OF THE CYBERSECURITY AND

INFRASTRUCTURE SECURITY AGENCY

SUBJECT: Promoting United States Leadership in Quantum

Computing While Mitigating Risks to Vulnerable

Cryptographic Systems

This memorandum outlines my Administrations policies and initiatives related to quantum computing. It identifies key steps needed to maintain the Nations competitive advantage in quantum information science (QIS), while mitigating the risks of quantum computers to the Nations cyber, economic, and national security. It directs specific actions for agencies to take as the United States begins the multi-year process of migrating vulnerable computer systems to quantum-resistant cryptography. A classified annex to this memorandum addresses sensitive national security issues.

Section 1. Policy. (a) Quantum computers hold the potential to drive innovations across the American economy, from fields as diverse as materials science and pharmaceuticals to finance and energy. While the full range of applications of quantum computers is still unknown, it is nevertheless clear that Americas continued technological and scientific leadership will depend, at least in part, on the Nations ability to maintain a competitive advantage in quantum computing and QIS.

(b) Yet alongside its potential benefits, quantum computing also poses significant risks to the economic and national security of the United States. Most notably, a quantum computer of sufficient size and sophistication also known as a cryptanalytically relevant quantum computer (CRQC) will be capable of breaking much of the public-key cryptography used on digital systems across the United States and around the world. When it becomes available, a CRQC could jeopardize civilian and military communications, undermine supervisory and control systems for critical infrastructure, and defeat security protocols for most Internet-based financial transactions.

(c) In order to balance the competing opportunities and risks of quantum computers, it is the policy of my Administration: (1) to maintain United States leadership in QIS, through continued investment, partnerships, and a balanced approach to technology promotion and protection; and (2) to mitigate the threat of CRQCs through a timely and equitable transition of the Nations cryptographic systems to interoperable quantumresistant cryptography.

(d) Additional guidance and directives may be required in the future as quantum computing technologies and their associated risks mature.

Sec. 2. Promoting United States Leadership. (a) The United States must pursue a whole-of-government and wholeofsociety strategy to harness the economic and scientific benefits of QIS, and the security enhancements provided by quantum-resistant cryptography. This strategy will require a coordinated, proactive approach to QIS research and development (R&D), an expansion of education and workforce programs, and a focus on developing and strengthening partnerships with industry, academic institutions, allies, and like-minded nations.

(b) The United States must seek to encourage transformative and fundamental scientific discoveries through investments in core QIS research programs. Investments should target the discovery of new quantum applications, new approaches to quantum-component manufacturing, and advances in quantumenabling technologies, such as photonics, nanofabrication, and cryogenic and semiconductor systems.

(c) The United States must seek to foster the next generation of scientists and engineers with quantum-relevant skill sets, including those relevant to quantum-resistant cryptography. Education in QIS and related cybersecurity principles should be incorporated into academic curricula at all levels of schooling to support the growth of a diverse domestic workforce. Furthermore, it is vital that we attract and retain talent and encourage career opportunities that keep quantum experts employed domestically.

(d) To promote the development of quantum technology and the effective deployment of quantum-resistant cryptography, theUnited States must establish partnerships with industry; academia; and State, local, Tribal, and territorial (SLTT) governments. These partnerships should advance joint R&D initiatives and streamline mechanisms for technology transfer between industry and government.

(e) The United States must promote professional and academic collaborations with overseas allies and partners. This international engagement is essential for identifying and following global QIS trends and for harmonizing quantum security and protection programs.

(f) In support of these goals, within 90 days of the date of this memorandum, agencies that fund research in, develop, or acquire quantum computers shall coordinate with the Director of the Office of Science and Technology Policy to ensure a coherent national strategy for QIS promotion and technology protection, including for workforce issues. To facilitate this coordination, all such agencies shall identify a liaison to the National Quantum Coordination Office to share information and best practices, consistent with section 102(b)(3) of the National Quantum Initiative Act (Public Law 115-368) and section 6606 of the National Defense Authorization Act for Fiscal Year 2022 (Public Law 117-81). All coordination efforts shall be undertaken with appropriate protections for sensitive and classified information and intelligence sources and methods.

Sec. 3. Mitigating the Risks to Encryption. (a) Any digital system that uses existing public standards for publickey cryptography, or that is planning to transition to such cryptography, could be vulnerable to an attack by a CRQC. To mitigate this risk, the United States must prioritize the timely and equitable transition of cryptographic systems to quantum-resistant cryptography, with the goal of mitigating as much of the quantum risk as is feasible by 2035. Currently, the Director of the National Institute of Standards and Technology (NIST) and the Director of the National Security Agency (NSA), in their capacity as the National Manager for National Security Systems (National Manager), are each developing technical standards for quantumresistant cryptography for their respective jurisdictions. The first sets of these standards are expected to be released publicly by 2024.

(b) Central to this migration effort will be an emphasis on cryptographic agility, both to reduce the time required to transition and to allow for seamless updates for future cryptographic standards. This effort is an imperative across all sectors of the United States economy, from government to critical infrastructure, commercial services to cloud providers, and everywhere else that vulnerable public-key cryptography is used.

(c) Consistent with these goals:

(i) Within 90 days of the date of this memorandum, the Secretary of Commerce, through the Director of NIST, shall initiate an open working group with industry, including critical infrastructure owners and operators, and other stakeholders, as determined by the Director of NIST, to further advance adoption of quantum-resistant cryptography. This working group shall identify needed tools and data sets, and other considerations to inform the development by NIST of guidance and best practices to assist with quantumresistant cryptography planning and prioritization. Findings of this working group shall be provided, on an ongoing basis, to the Director of the Office of Management and Budget (OMB), the Assistant to the President for National Security Affairs (APNSA), and the National Cyber Director to incorporate into planning efforts.

(ii) Within 90 days of the date of this memorandum, the Secretary of Commerce, through the Director of NIST, shall establish a Migration to Post-Quantum Cryptography Project at the National Cybersecurity Center of Excellence to work with the private sector to address cybersecurity challenges posed by the transition to quantum-resistant cryptography. This project shall develop programs for discovery and remediation of any system that does not use quantum-resistant cryptography or that remains dependent on vulnerable systems.

(iii) Within 180 days of the date of this memorandum, and annually thereafter, the Secretary of Homeland Security, through the Director of the Cybersecurity and Infrastructure Security Agency (CISA), and in coordination with Sector Risk Management Agencies, shall engage with critical infrastructure and SLTT partners regarding the risks posed by quantum computers, and shall provide an annual report to the Director of OMB, the APNSA, and the National Cyber Director that includes recommendations for accelerating those entities migration to quantum-resistant cryptography.

(iv) Within 180 days of the date of this memorandum, and on an ongoing basis, the Director of OMB, in consultation with the Director of CISA, the Director of NIST, the National Cyber Director, and the Director of NSA, shall establish requirements for inventorying all currently deployed cryptographic systems, excluding National Security Systems (NSS). These requirements shall include a list of key information technology (IT) assets to prioritize, interim benchmarks, and a common (and preferably automated) assessment process for evaluating progress on quantum-resistant cryptographic migration in IT systems.

(v) Within 1 year of the date of this memorandum, and on an annual basis thereafter, the heads of all Federal Civilian Executive Branch (FCEB) Agencies shall deliver to the Director of CISA and the National Cyber Director an inventory of their IT systems that remain vulnerable to CRQCs, with a particular focus on High Value Assets and High Impact Systems. Inventories should include current cryptographic methods used on IT systems, including system administrator protocols, non-security software and firmware that require upgraded digital signatures, and information on other key assets.

(vi) By October 18, 2023, and on an annual basis thereafter, the National Cyber Director shall, based on the inventories described in subsection 3(c)(v) of this memorandum and in coordination with the Director of CISA and the Director of NIST, deliver a status report to the APNSA and the Director of OMB on progress made by FCEB Agencies on their migration of non-NSS IT systems to quantum-resistant cryptography. This status report shall include an assessment of the funding necessary to secure vulnerable IT systems from the threat posed by adversarial access to quantum computers, a description and analysis of ongoing coordination efforts, and a strategy and timeline for meeting proposed milestones.

(vii) Within 90 days of the release of the first set of NIST standards for quantum-resistant cryptography referenced in subsection 3(a) of this memorandum, andon an annual basis thereafter, as needed, the Secretary of Commerce, through the Director of NIST, shall release a proposed timeline for the deprecation of quantum-vulnerable cryptography in standards, with the goal of moving the maximum number of systems off quantum-vulnerable cryptography within a decade of the publication of the initial set of standards. The Director of NIST shall work with the appropriate technical standards bodies to encourage interoperability of commercial cryptographic approaches.

(viii) Within 1 year of the release of the first set of NIST standards for quantum-resistant cryptography referenced in subsection 3(a) of this memorandum, the Director of OMB, in coordination with the Director of CISA and the Director of NIST, shall issue a policy memorandum requiring FCEB Agencies to develop a plan to upgrade their non-NSS IT systems to quantum-resistant cryptography. These plans shall be expeditiously developed and be designed to address the most significant risks first. The Director of OMB shall work with the head of each FCEB Agency to estimate the costs to upgrade vulnerable systems beyond already planned expenditures, ensure that each plan is coordinated and shared among relevant agencies to assess interoperability between solutions, and coordinate with the National Cyber Director to ensure plans are updated accordingly.

(ix) Until the release of the first set of NIST standards for quantum-resistant cryptography referenced in subsection 3(a) of this memorandum, the heads of FCEB Agencies shall not procure any commercial quantum-resistant cryptographic solutions for use in IT systems supporting enterprise and mission operations. However, to assist with anticipating potential compatibility issues, the heads of such FCEB Agencies should conduct tests of commercial solutions that have implemented pre-standardized quantum-resistant cryptographic algorithms. These tests will help identify interoperability or performance issues that may occur in Federal environments at an early stage and will contribute to the mitigation of those issues. The heads of such FCEB Agencies should continue to implement and, where needed, upgrade existing cryptographic implementations, but should transition to quantum-resistant cryptography only once the first set of NIST standards for quantum-resistant cryptography is complete and implemented in commercial products. Conformance with international standards should be encouraged, and may be required for interoperability.

(x) Within 1 year of the date of this memorandum, and annually thereafter, the Director of NSA, serving in its capacity as the National Manager, in consultation with the Secretary of Defense and the Director of National Intelligence, shall provide guidance on quantum-resistant cryptography migration, implementation, and oversight for NSS. This guidance shall be consistent with National Security Memorandum/NSM-8 (Improving the Cybersecurity of National Security, Department of Defense, and Intelligence Community Systems). The National Manager shall share best practices and lessons learned with the Director of OMB and the National Cyber Director, as appropriate.

(xi) Within 1 year of the date of this memorandum, and on an ongoing basis, and consistent with section 1 of NSM-8, the heads of agencies operating NSS shall identify and document all instances where quantum-vulnerable cryptography is used by NSS and shall provide this information to the National Manager.

(xii) Within 180 days of issuance by the National Manager of its standards on quantum-resistant cryptography referenced in section 3(a) of this memorandum, and annually thereafter, the National Manager shall release an official timeline for the deprecation of vulnerable cryptography in NSS, until the migration to quantum-resistant cryptography is completed.

(xiii) Within 1 year of issuance by the National Manager of its standards on quantum-resistant cryptography for referenced in subsection 3(a) of this memorandum, and annually thereafter, the heads of agencies operating or maintaining NSS shall submit to the National Manager, and, as appropriate, the Department of Defense Chief Information Officer or the Intelligence Community Chief Information Officer, depending on their respective jurisdictions, an initial plan to transition to quantumresistant cryptography in all NSS. These plans shall be updated annually and shall include relevant milestones, schedules, authorities, impediments, funding requirements, and exceptions authorized by the head of the agency in accordance with section 3 of NSM-8 and guidance from the National Manager.

(xiv) By December 31, 2023, agencies maintaining NSS shall implement symmetric-key protections (e.g., High Assurance Internet Protocol Encryptor (HAIPE) exclusion keys or VPN symmetric key solutions) to provide additional protection for quantum-vulnerable key exchanges, where appropriate and in consultation with the National Manager. Implementation should seek to avoid interference with interoperability or other cryptographic modernization efforts.

(xv) By December 31, 2023, the Secretary of Defense shall deliver to the APNSA and the Director of OMB an assessment of the risks of quantum computing to the defense industrial base and to defense supply chains, along with a plan to engage with key commercial entities to upgrade their IT systems to achieve quantum resistance.

Sec. 4. Protecting United States Technology. (a) In addition to promoting quantum leadership and mitigating the risks of CRQCs, the United States Government must work to safeguard relevant quantum R&D and intellectual property (IP) and to protect relevant enabling technologies and materials. Protection mechanisms will vary, but may include counterintelligence measures, well-targeted export controls, and campaigns to educate industry and academia on the threat of cybercrime and IP theft.

(b) All agencies responsible for either promoting or protecting QIS and related technologies should understand the security implications of adversarial use and consider those security implications when implementing new policies, programs, and projects.

(c) The United States should ensure the protection of U.S.developed quantum technologies from theft by our adversaries. This will require campaigns to educate industry, academia, and SLTT partners on the threat of IP theft and on the importance of strong compliance, insider threat detection, and cybersecurity programs for quantum technologies. As appropriate, Federal law enforcement agencies and other relevant agencies should investigate and prosecute actors who engage in the theft of quantum trade secrets or who violate United States export control laws. To support efforts to safeguard sensitive information, Federal law enforcement agencies should exchange relevant threat information with agencies responsible for developing and promoting quantum technologies.

(d) Consistent with these goals, by December 31, 2022, the heads of agencies that fund research in, develop, or acquire quantum computers or related QIS technologies shall develop comprehensive technology protection plans to safeguard QIS R&D, acquisition, and user access. Plans shall be coordinated across agencies, including with Federal law enforcement, to safeguard quantum computing R&D and IP, acquisition, and user access. These plans shall be updated annually and provided to the APNSA, the Director of OMB, and the Co-Chairs of the National Science and Technology Council Subcommittee on Economic and Security Implications of Quantum Science.

Sec. 5. Definitions. For purposes of this memorandum:

(a) the term agency has the meaning ascribed to it under 44 U.S.C. 3502;

(b) the term critical infrastructure means systems and assets, whether physical or virtual, so vital to the UnitedStates that their incapacitation or destruction would have a debilitating effect on the Nations security, economy, public health and safety, or any combination thereof;

(c) the term cryptographic agility means a design feature that enables future updates to cryptographic algorithms and standards without the need to modify or replace the surrounding infrastructure;

(d) the term cryptanalytically relevant quantum computer or CRQC means a quantum computer capable of undermining current public-key cryptographic algorithms;

(e) the term Federal Civilian Executive Branch Agency or FCEB Agency means any agency except the Department of Defense or agencies in the Intelligence Community;

(f) the term high value asset means information or an information system that is so critical to an organization that the loss or corruption of this information, or loss of access to the system, would have serious impacts on the organizations ability to perform its mission or conduct business;

(g) the term high impact system means an information system in which at least one security objective (i.e., confidentiality, integrity, or availability) is assigned a Federal Information Processing Standards (FIPS) 199 potential impact value of high;

(h) the term information technology or IT has the meaning ascribed to it under 44 U.S.C. 3502;

(i) the term National Security Systems or NSS has the meaning ascribed to it in 44 U.S.C 3552(b)(6) and shall also include other Department of Defense and Intelligence Community systems, as described in 44 U.S.C. 3553(e)(2) and 44 U.S.C.3553(e)(3);

(j) the term quantum computer means a computer utilizing the collective properties of quantum states, such as superposition, interference and entanglement, to perform calculations. The foundations in quantum physics give a quantum computer the ability to solve a subset of hard mathematical problems at a much faster rate than a classical (i.e., nonquantum) computer;

(k) the term quantum information sciences or QIS has the meaning ascribed to it under 15 U.S.C. 8801(6) and means the study and application of the laws of quantum physics for the storage, transmission, manipulation, computing, or measurement of information; and

(l) the term quantum-resistant cryptography means those cryptographic algorithms or methods that are assessed not to be specifically vulnerable to attack by either a CRQC or classical computer. This is also referred to as post-quantum cryptography.

Sec. 6. General Provisions. (a) Nothing in this memorandum shall be construed to impair or otherwise affect:

(i) the authority granted by law to an executive department or agency, or the head thereof, to include the protection of intelligence sources and methods; or

(ii) the functions of the Director of OMB relating to budgetary, administrative, or legislative proposals.

(b) This memorandum shall be implemented consistent with applicable law and subject to the availability of appropriations.

(c) This memorandum shall also be implemented without impeding the conduct or support of intelligence activities, and all implementation measures shall be designed to be consistent with appropriate protections for sensitive information and intelligence sources and methods.

(d) This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the UnitedStates, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

JOSEPH R. BIDEN JR.

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National Security Memorandum on Promoting United States Leadership in ...

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Quantum-computing outfit D-Wave has announced commercial access to an "experimental prototype" of its Advantage2 quantum annealing computer.

D-Wave is beating its own path to qubit processors with its quantum annealing approach. According to D-Wave, the Advantage2 prototype available today features over 500 qubits. It's a preview of a much larger Advantage2 it hopes to be available by 2024 with 7,000 qubits.

Access to the Advantage2 prototype is restricted to customers who have a D-Wave's Leap cloud service subscription, but developers interested in trying D-Wave's quantum cloud can sign up to get "one minute of free use of the actual quantum processing units (QPUs) and quantum hybrid solvers" that run on its earlier Advantage QPU.

The Advantage2 prototype is built with D-Wave's Zephyr connection technology that it claims offers higher connectivity between qubits than its predecessor topology called Pegasus, which is used in its Advantage QPU.

D-Wave says the Zephyr design enables shorter chains in its Advantage2 quantum chips, which can make them friendlier for calculations that require extra precision.

SEE:What is quantum computing? Everything you need to know about the strange world of quantum computers

"The Advantage2 prototype is designed to share what we're learning and gain feedback from the community as we continue to build towards the full Advantage2 system," says Emile Hoskinson, director of quantum annealing products at D-Wave.

"With Advantage2, we're pushing that envelope again demonstrating that connectivity and reduction in noise can be a delivery vehicle for even greater performance once the full system is available. The Advantage2 prototype is an opportunity for us to share our excitement and give a sneak peek into the future for customers bringing quantum into their applications."

While quantum computing is still experimental, senior execs are priming up for it as a business disruptor by 2030, according to a survey by consultancy EY. The firm found found that 81% of senior UK executives expect quantum computing to play a significant role in their industry by 2030.

Fellow consultancy McKinsey this month noted funding for quantum technology startups doubled in the past two years, from $700 million in 2020 to $1.4 billion in 2021. McKinsey sees quantum computing shaking up pharmaceuticals, chemicals, automotive, and finance industries, enabling players to "capture nearly $700 billion in value as early as 2035" through improved simulation and better machine learning. It expects revenues from quantum computing to exceed $90 billion by 2040.

D-Wave's investors include PSP Investments, Goldman Sachs, BDC Capital, NEC Corp, Aegis Group Partners, and the CIA's VC firm, In-Q-Tel.

Original post:

Quantum computing: D-Wave shows off prototype of its next quantum annealing computer - ZDNet

Flashes of what may become a transformative new technology are coursing through a network of optic fibers under Chicago.

Researchers have created one of the worlds largest networks for sharing quantum information a field of science that depends on paradoxes so strange that Albert Einstein didnt believe them.

The network, which connects the University of Chicago with Argonne National Laboratory in Lemont, is a rudimentary version of what scientists hope someday to become the internet of the future. For now, its opened up to businesses and researchers to test fundamentals of quantum information sharing.

The network was announced this week by the Chicago Quantum Exchange which also involves Fermi National Accelerator Laboratory, Northwestern University, the University of Illinois and the University of Wisconsin.

People work in the Pritzker Nanofabrication Facility, June 15, 2022, inside the William Eckhardt Research Center at the University of Chicago. The Chicago Quantum Exchange is expanding its quantum network to make it available to more researchers and companies. Quantum computing is a pioneering, secure format said to be hacker-proof and of possible use by banks, the health care industry, and others for secure communications. (Erin Hooley / Chicago Tribune)

With a $500 million federal investment in recent years and $200 million from the state, Chicago, Urbana-Champaign, and Madison form a leading region for quantum information research.

Why does this matter to the average person? Because quantum information has the potential to help crack currently unsolvable problems, both threaten and protect private information, and lead to breakthroughs in agriculture, medicine and climate change.

While classical computing uses bits of information containing either a 1 or zero, quantum bits, or qubits, are like a coin flipped in the air they contain both a 1 and zero, to be determined once its observed.

That quality of being in two or more states at once, called superposition, is one of the many paradoxes of quantum mechanics how particles behave at the atomic and subatomic level. Its also a potentially crucial advantage, because it can handle exponentially more complex problems.

Another key aspect is the property of entanglement, in which qubits separated by great distances can still be correlated, so a measurement in one place reveals a measurement far away.

The newly expanded Chicago network, created in collaboration with Toshiba, distributes particles of light, called photons. Trying to intercept the photons destroys them and the information they contain making it far more difficult to hack.

The new network allows researchers to push the boundaries of what is currently possible, said University of Chicago professor David Awschalom, director of the Chicago Quantum Exchange.

Fourth-year graduate student Cyrus Zeledon, left, and postdoctoral student Leah Weiss, right, show senior undergraduate Tiarna Wise around one of the quantum science laboratories, June 15, 2022, inside the William Eckhardt Research Center at the University of Chicago. (Erin Hooley / Chicago Tribune)

However, researchers must solve many practical problems before large-scale quantum computing and networking are possible.

For instance, researchers at Argonne are working on creating a foundry where dependable qubits could be forged. One example is a diamond membrane with tiny pockets to hold and process qubits of information. Researchers at Argonne also have created a qubit by freezing neon to hold a single electron.

Because quantum phenomena are extremely sensitive to any disturbance, they might also be used as tiny sensors for medical or other applications but theyd also have to be made more durable.

The quantum network was launched at Argonne in 2020, but has now expanded to Hyde Park and opened for use by businesses and researchers to test new communication devices, security protocols and algorithms. Any venture that depends on secure information, such as banks financial records of hospital medical records, would potentially use such a system.

Quantum computers, while in development now, may someday be able to perform far more complex calculations than current computers, such as folding proteins, which could be useful in developing drugs to treat diseases such as Alzheimers.

In addition to driving research, the quantum field is stimulating economic development in the region. A hardware company, EeroQ, announced in January that its moving its headquarters to Chicago. Another local software company, Super.tech, was recently acquired, and several others are starting up in the region.

Because quantum computing could be used to hack into traditional encryption, it has also attracted the bipartisan attention of federal lawmakers. The National Quantum Initiative Act was signed into law by President Donald Trump in 2018 to accelerate quantum development for national security purposes.

In May, President Joe Biden directed federal agency to migrate to quantum-resistant cryptography on its most critical defense and intelligence systems.

Ironically, basic mathematical problems, such as 5+5=10, are somewhat difficult through quantum computing. Quantum information is likely to be used for high-end applications, while classical computing will likely continue to be practical for many daily uses.

Renowned physicist Einstein famously scoffed at the paradoxes and uncertainties of quantum mechanics, saying that God does not play dice with the universe. But quantum theories have been proven correct in applications from nuclear energy to MRIs.

Stephen Gray, senior scientist at Argonne, who works on algorithms to run on quantum computers, said quantum work is very difficult, and that no one understands it fully.

But there have been significant developments in the field over the past 30 years, leading to what some scientists jokingly called Quantum 2.0, with practical advances expected over the next decade.

Were betting in the next five to 10 years therell be a true quantum advantage (over classical computing), Gray said. Were not there yet. Some naysayers shake their canes and say its never going to happen. But were positive.

Just as early work on conventional computers eventually led to cellphones, its hard to predict where quantum research will lead, said Brian DeMarco, professor of physics at the University of Illinois at Urbana-Champaign, who works with the Chicago Quantum Exchange.

Thats why its an exciting time, he said. The most important applications are yet to be discovered.

rmccoppin@chicagotribune.com

The rest is here:

Chicago Quantum Exchange takes first steps toward a future that could revolutionize computing, medicine and cybersecurity - Chicago Tribune

As the world grapples with the existential crisis that is climate change, technologies including quantum computing and AI can play a crucial role in reversing the damage.

According to a recent McKinsey and Company report, as businesses prepare for quantum advantage, they must consider the value in quantum computing as a significant tool for decarbonisation and limiting global warming to 1.5 degrees.

Meeting the goal of net-zero emissions that countries and some industries have committed to wont be possible without huge advances in climate technology that arent achievable today. Even the most powerful supercomputers available now are not able to solve some of these problems. Quantum computing could be a game-changer in those areas, the report said.

The authors have attested that quantum computing could be leveraged to develop climate technologies that would contribute to an additional seven gigatons of carbon dioxide abatement by 2035.

According to the authors, Quantum computing could bring about step changes throughout the economy that would have a huge impact on carbon abatement and carbon removal, including by helping to solve persistent sustainability problems such as curbing methane produced by agriculture.

"Making the production of cement emissions-free, improving electric batteries for vehicles, developing significantly better renewable solar technology, finding a faster way to bring down the cost of hydrogen to make it a viable alternative to fossil fuels, and using green ammonia as a fuel and a fertiliser.

In a separate McKinsey report, Jeremy OBrien, one of the worlds leading quantum computing experts, and co-founder and CEO of PsiQuantum explained the significance of quantum computing in providing better solutions for carbon reduction technologies such as carbon capture and for electric batteries.

Many low-carbon technologies involve complex systems, particularly around chemistry and materials science, which nobody fully understands, said OBrien.

Right now, we have to test thousands of molecular combinations, which means lengthy and hugely expensive trial-and-error lab experiments, with often disappointing, marginal improvements.

That is exactly where quantum computing will play such a critical role: in breaking through these scientific and technical barriers.

The most recent Intergovernmental Panel on Climate Change (IPCC) report reveals that with proper governance, digital technologies can contribute to climate change mitigation and assist in meeting the United Nations 17 Sustainable Development Goals.

Sensors, Internet of Things, robotics, and artificial intelligence can improve energy management in all sectors, increase energy efficiency, and promote the adoption of many low-emission technologies, including decentralised renewable energy while creating economic opportunities, the IPCC report says.

However, the authors caution that mitigation gains can be counterbalanced by trade-offs including increasing electronic waste, negative impacts on the labour market and the growing digital divide.

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The role of quantum computing and AI in reversing climate change - Digital Nation

While business leaders expect quantum computing to play a significant role in industry by 2030, some experts don't believe the tech is going to be ready for production deployment in the near future.

The findings, from a survey titled "2022 Quantum Readiness" commissioned by consultancy EY, refer to UK businesses, although it is likely that the conclusions are equally applicable to global organizations.

According to EY, 81 percent of senior UK executives expect quantum computing to have a significant impact in their industry within seven and a half years, with almost half (48 percent) believing that quantum technology will begin to transform industries as soon as 2025.

As for the naysayers who say quantum tech won't be ready for live deployment any time soon, the industry also suffers from a hype problem, with capabilities being exaggerated and even some accusations flying around of alleged falsification, as with the example of quantum startup IonQ that was recently accused by Scorpion Capital of misleading investors about the effectiveness of its quantum hardware.

Joseph Reger, Fujitsu Fellow, CTO of Central and Eastern Europe and Member of Quantum Computing Council of World Economic Forum, told The Register he is getting some "heat" for saying quantum is not nearly a thing yet.

"There are impressive advantages that pre-quantum or quantum-inspired technologies provide. They are less sexy, but very powerful."

He added: "Some companies are exaggerating the time scales. If quantum computing gets overhyped, we are likely to face the first quantum winter."

Fujitsu is itself developing quantum systems, and announced earlier this year that it was working to integrate quantum computing with traditional HPC technology. The company also unveiled a high performance quantum simulator based on its PRIMEHPC FX 700 systems that it said will serve as an important bridge towards the development of quantum computing applications in future.

Meanwhile, EY claims that respondents were "almost unanimous" in their belief that quantum computing will create a moderate or high level of disruption for their own organization, industry sector, and the broader economy in the next five years.

Despite this, the survey finds that strategic planning for quantum computing is still at an embryonic stage for most organizations, with only 33 percent involved in strategic planning for how quantum will affect them and only a quarter have appointed specialist leaders or set up pilot teams.

The survey conducted in February-March 2022 covered 501 UK-based executives, all with senior roles in their organisations, who had to demonstrate at least a moderate (but preferably a high) level of understanding of quantum computing. EY said they originally approached 1,516 executives, but only 501 met this requirement, which in and of itself tells a tale.

EY's Quantum Computing Leader, Piers Clinton-Tarestad, said the survey reveals a disconnect between the pace at which some industry leaders expect quantum to start affecting business and their preparedness for those impacts.

"Maximizing the potential of quantum technologies will require early planning to build responsive and adaptable organisational capabilities," he said, adding that this is a challenge because the progress of quantum has accelerated, but it is "not following a steady trajectory."

For example, companies with quantum processors have increased the power of their hardware dramatically over the past several years, from just a handful of qubits to over a hundred in the case of IBM, which expects to deliver a 4,158-qubit system by 2025. Yet despite these advances, quantum computers remain a curiosity, with most operational systems deployed in research laboratories or made available via a cloud service for developers to experiment with.

Clinton-Tarestad said "quantum readiness" is "not so much a gap to be assessed as a road to be walked," with the next steps in the process being regularly revisited as the landscape evolves. He warned businesses that expect to see disruption in their industry within the next three or five years need to act now.

According to EY's report, executives in consumer and retail markets are those most likely to believe that quantum will play a significant role by 2025, with just over half of technology, media and telecommunications (TMT) executives expecting an impact within the same time frame. Most respondents among health and life sciences companies think this is more likely to happen later, between 2026 and 2035.

Most organizations surveyed expect to start their quantum preparations within the next two years, with 72 percent aiming to start by 2024.

However, only a quarter of organizations have got as far as recruiting people with the necessary skills to lead quantum computing efforts, although 68 percent said they are aiming to set up pilot teams to explore the potential of quantum for their business by 2024.

Fear of falling behind because rival companies are working to develop their own quantum capabilities is driving some respondents to start quantum projects, while the applications of quantum computing anticipated by industry leaders would advance operations involving AI and machine learning, especially among financial services, automotive and manufacturing companies. TMT respondents cited potential applications in cryptography and encryption as being the most likely use of quantum computing.

While the EY report warns about companies potentially losing out to rivals on the benefits of quantum computing, there are also dangers that organizations should be preparing for now, as Intel warned about during its Intel Vision conference last month.

One of these is that quantum computers could be used to break current cryptographic algorithms, meaning that the confidentiality of both personal and enterprise data could be at risk. This is not a far-off threat, but something that organizations need to consider right now, according to Sridhar Iyengar, VP of Intel Labs and Director of Security and Privacy Research.

"Adversaries could be harvesting encrypted data right now, so that they can decrypt it later when quantum computers are available. This could be sensitive data, such as your social security number or health records, which are required to be protected for a long period of time," Iyengar told us.

Organizations may want to address threats like this by taking steps such as evaluating post-quantum cryptography algorithms and increasing the key sizes for current crypto algorithms like AES.

Or they may simply decide to adopt a wait and see attitude. EY will no doubt be on hand to sell consultancy services to help clarify their thinking.

Read more from the original source:

Businesses brace for quantum computing disruption by end of decade - The Register

In the hype-tastic world of quantum computing, consulting giant McKinsey & Company claims that the still-nascent field has the potential to create $80 billion in new revenue for businesses across industries.

It's a claim McKinsey has repeated nearly two dozen times on Twitter since March to promote its growing collection of research diving into various aspects of quantum computing, from startup and government funding to use cases and its potential impact on a range of industries.

The consulting giant believes this $80 billion figure represents the "value at stake" for quantum computing players but not the actual value that use cases could create [PDF]. This includes companies working in all aspects of quantum computing, from component makers to service providers.

Despite wildly optimistic numbers, McKinsey does ground the report in a few practical realities. For instance, in a Wednesday report, the firm says the hardware for quantum systems "remains too immature to enable a significant number of use cases," which, in turn, limits the "opportunities for fledgling software players." The authors add that this is likely one of the reasons why the rate of new quantum startups entering the market has begun to slow.

Even the top of McKinsey's page for quantum computing admits that capable systems won't be ready until 2030, which is in line with what various industry players, including Intel, are expecting. Like fusion, it's always a decade or so away.

McKinsey, like all companies navigating if quantum computing has any real-world value, is trying to walk a fine line, exploring the possibilities of quantum computing while showing the ways the tech is still disconnected from ordinary enterprise reality.

"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," McKinsey wrote in a December 2021 article about how use cases "are getting real."

One could argue the report is something of a metaphor for the quantum industry in 2022. Wildl optimism about future ecosystem profitability without really understanding what the tech will mean and to whom--and at what scale.

Continued here:

McKinsey thinks quantum computing could create $80b in revenue ... eventually - The Register

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Breakthroughs in physics, engineering, and classical computing were prerequisites for building a quantum computer, which is why for many decades the task was, and in some cases remains, beyond the limits of available technology. IonQ Annual Report FY 21

The last 6 words of the quote above should be etched into the minds of every potential and existing IonQ (NYSE:IONQ) investor.

Figure 1: IONQ Stock Price Performance (Yves Sukhu)

I certainly hope most long investors in IONQ understand that the stock, even at ~$5/share, must be, by every definition, speculative given that (extrapolating from their own words) practical quantum computing systems may never exist. If so, presumably those investors were and are prepared for steep losses, as with the stocks ~(71%) decrease so far this year.

Figure 2: IONQ and Selected Competitor Performance (Yves Sukhu)

Yet, it must be acknowledged that IONQ, along with their true peers in the quantum computing space, is trying to build, what appears to be, the next great leap in computing systems. On that point, the company may merit a value that is somewhat independent of what might be deserved on mere financial performance alone. After all, the combined economic and societal value of practical quantum computing if it could be realized may be almost unimaginable.

Trading at just over $5/share as of market close June 17, 2022, IONQ may appear as something of a bargain considering its 2021 high over $30. But, is it?

I couldnt resist going a bit nerdy in the title of this section. For readers who dont get the reference, I will explain at the end of the article. For readers who do get the reference, yes, I know it was corny . But, back to business.

I think there are a few reasons to be excited about IonQs prospects, which I outline as follows.

1. The market for quantum computing hardware, software, and services could exceed several billion dollars in a few years.

Figure 3: IonQ Company and Market Overview (IonQ Investor Updates Presentation March 2022)

As I write this, IonQs market capitalization is a hair below $1B. That might seem reasonable against a projected total addressable market (TAM) of $65B, as offered in Figure 3. At first glance this forecast may strike as realistic, given the many potential applications for practical quantum computing; these applications vary from new drug discovery to options pricing within the finance industry to network and loading optimization for shipping and logistics carriers. If the forecast is accurate, it might be argued that IonQ is actually undervalued based on the potential of the market. Although, in making that statement, investors should keep in mind the quantum computing space is fairly crowded with both large and small public players, including IONQ, Rigetti (RGTI), IBM (IBM), Alphabet (GOOG, GOOGL), and Honeywell (HON), as well as a growing number of start-ups. In other words, the pie hardly belongs exclusively to IonQ. Still, the riches of quantum computing are expected to grow exponentially as true quantum advantages (i.e. quantum computers with provable advantages over classical computers) hopefully emerge in the future.

Figure 4: Expected Phases of Quantum Computing Maturity (IonQ Investor Updates Presentation March 2022)

2. IONQs technological path could be the right path that allows them to win the race. As mentioned in the introduction, a practical (or useful) quantum computer is the ultimate prize being chased after by the various major quantum computing players. I imagine most IONQ investors are aware that the company differentiates itself (largely) on the basis of its particular approach to quantum computing hardware, which is trapped-ion technology pioneered by IONQ co-founders Chris Monroe and Jungsang Kim. This stands in contrast to competing quantum computing hardware approaches being explored by other players who use fundamentally different technologies to implement physical qubits, such as photon-based systems and superconducting circuits. IONQ notes a number of advantages with respect to trapped-ion technology, including its error-resilient characteristics and ability to operate at room temperature.

Figure 5: IonQ Unique Technological Advantages (IonQ Investor Updates Presentation March 2022)

In regard to the latter, certain competing technologies such as superconducting circuits can only operate at very, very low temperatures. The former is an important point as well since individual logical qubits in a quantum computing system must be composed of several individual physical qubits due to decoherence and other error-inducing aspects of maintaining and manipulating physical qubit systems. The reduced error correction overhead required by IONQs hardware suggests that the firms technology may ultimately yield to smaller, more practical systems. If you have read about quantum computing firms introducing quantum computing machines with larger and larger amounts of qubits, that is in part driven by the need to compensate for a single logical qubit with many physical qubits.

Figure 6: Expected Phases of Quantum Computing Maturity (IonQ Investor Updates Presentation March 2022)

Finally, the company also details that they have solved, or may be on the path to solving, certain engineering and manufacturing challenges typically associated with trapped-ion technology, thus affording the firm something of a competitive moat versus other players seeking to build competing quantum computing systems based on trapped ion technology.

3. IONQs backing includes leading academic and governmental research entities, as well as premier technology investors. IONQ as a business entity was born in 2015 with $2M in seed funding from New Enterprise Associates, with enabling technologies based on its founders research activities at Duke University and University of Maryland. The companys subsequent funding rounds included Google Ventures, Amazon Web Services, and Samsung as investors. I think we can all agree that the prior entities hardly seem like the type that would suffer fools; and therefore IONQs investor base lends credence to the (potential) viability of their technological approach as discussed in the point above, although these investors are likely to bet on multiple approaches versus a single one. Nonetheless, IONQ more recently announced they were selected by the Defense Advanced Research Projects Agency (DARPA) as the only quantum computing hardware vendor to participate on a multi-million dollar quantum benchmark project with the intent to establish reliable metrics by which to compare the power of different quantum computing systems. This too, I think, must say something (positive) about the firms technological path.

Of course, I would be remiss not to discuss negative points and observations; and I thus offer the following counter-arguments against a play in the firm.

1. No one knows what technology might win. While IONQ lays out a compelling story around their trapped-ion technology for quantum computing, no one really knows what technology (or technologies) will win in the end. After all, if it was obvious that trapped-ion technology is a superior path, every other player would have switched to that approach by now.

2. IONQ has virtually non-existent revenues as compared to its market cap. IONQs net revenue for FY 21 stood at just over ~$2M. The good news is that sales growth is trending in the right direction, with the company recording $2M in net sales in Q1 FY 22 alone, along with $4.2M in total bookings. The revenue forecast for FY 22 is in the range of $10.2M to $10.7M. Readers can do the math: with ~198M shares outstanding, the high end of the FY 22 forecast range produces a P/S multiple above 90 using the current share price.

3. Forecasts for the quantum computing market are questionable at best. IONQ references a Prescient and Strategic Intelligence report from February 2020 when identifying their TAM forecast of $65B by 2030 in Figure 3. The actual report, which I believe to be this one, appears to offer a different forecast for the quantum computing market; so, I am not exactly clear how IONQ derived the estimate listed in the prior graphic. Regardless, with no one even sure if practical quantum computing is even possible, any forecast must obviously be taken with a grain of salt.

It must be acknowledged that IONQ, along with their peers in the quantum computing space, is attempting to tackle what may ultimately prove impossible: practical quantum computing may be prohibited by nature itself, as I noted in a prior article on the subject. On that point, the company may merit a value that is somewhat independent of what might be deserved on mere financial performance alone. After all, the combined economic and societal value of practical quantum computing if it could be realized may be almost unimaginable.

As I mentioned, IONQs market capitalization is just below $1B as I write this. Is this valuation fair? This is going to sound like a cop-out, but I honestly have no idea. How do you value something that could be worth $0, if practical quantum computing proves infeasible, or be worth an amount beyond your wildest dreams if practical quantum computing is feasible and IONQ happens to have the technology that is going to win?

I hypothesized in the introduction that most investors in IONQ must know that their investment is necessarily speculative. On that basis, I would think a Hold recommendation is logical since we, as investors, can only sit back and watch how the story in quantum computing unfolds. A word of caution, however. I was reading an article some time ago by Scott Aaronson, another leading mind in the world of quantum computing, who said (paraphrasing) that it would be a shame to find out that any given scientist (like him) spent most of their life chasing a computing paradigm (i.e. practical quantum computing) and that paradigm turns out to be impossible. But, lest I end this analysis on a bad note, Mr. Aaronson offered in that same article that scientific evidence hints that practical computing may be possible.

I concede that IONQ does not fit my personal investing strategy as I am hesitant to jump on a firm whose future is somewhat binary (i.e. worth nothing or worth everything). That being said, I find their story and technology compelling. Should the stock suffer another steep drop for whatever reason I might be inclined to buy a few shares, but purely on a speculative basis.

P.S. If you got this far, thanks for reading. The nerdy title reference I made in the second section was with respect to bra-ket notation, which is used within quantum computing and quantum mechanics to describe quantum states.

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IonQ Stock: Building The Future Of Computing And Is Only $5/Share - Seeking Alpha