Is the quantum computing market going through a teenage phase?

By Dr Tess Skyrme, Principal Technology Analyst at IDTechEx

It is becoming clear that the time when this was a topic reserved for academic research and specialist physicists is over, and the quantum computing market is growing up. But after close to a decade of increased commercialisation efforts, IDTechEx asks, ‘Is the quantum computing market going through a teenage phase?’

Yet to fly the nest

The landscape of players within the quantum computing ecosystem is, of course, a combination of giants, scale-ups and startups. There are actors as large as IBM, Amazon, and Google – alongside a long list of university spinouts from across the globe. In the last few years, this latter group has largely made significant strides in progressing their technological readiness levels, growing in size, and raising ever more funds. More details on this progression are covered in depth in IDTechEx’s report, ‘Quantum Computing Market 2025-2045: Technology, Trends, Players, Forecasts’.

However, behind the scenes, the entire industry is still very dependent on its ‘parents’ – academia and government. Many bespoke fabrication facilities, core to the IP of many, are housed within university labs. Also, the funding many receive is partially private, but government grants are still key in keeping many afloat. Moreover, the funding for many on-premises installations within supercomputing centres or data centres has ultimately come from a parliamentary purse.

Whilst it is certainly expected – and essential – that at this stage of the industry, continued support to ease the transition from research to market comes from government, it is important to remain aware of its ongoing role when assessing the outlook for the quantum computing market’s growth in the medium term.

Costs of hardware installations are eye-watering, surpassing the tens of millions of dollars. But this doesn’t necessarily indicate that this scale of investment will continue and grow yearly. The ‘by research for research’ market can only have so much longevity or budget. Ultimately, many commercial end users are not convinced of the commercial value or advantage quantum computing could provide. As a young industry, demonstrating this at scale for multiple use cases will prove crucial in convincing the wider world that quantum computing isn’t over-hyped or a novelty.

Complicated relationships with friends

Growing up always sees relationships with friends become more complicated. For many years, the quantum computing market has been able to profess the benefits of collaboration and see success for one company as good for the industry as a whole rather than a competitive disadvantage. In many instances, this case is still being legitimately made, and publicly, many companies continue to celebrate the success of others in the quantum eco-system. However, speak to enough CEOs, engineers and marketing managers within individual companies – and they are relatively quick to identify the shortcomings in others that their technologies avoid. Similarly, modality sub-sectors are also quick to criticise one another.

Companies, to an extent, face a conundrum whereby governments are looking to foster eco-systems and local collaborations – but private funding wants confidence in a differentiated value proposition to others in the field. Perhaps best positioned to benefit from this in the near term are modality agnostic component and supply chain players, who can spread their bets across the industry and stay friends today without posing a threat tomorrow.

Beyond competition between technologies and individual companies is also the under-current of the quantum ‘space-race’ between nations. As always, the national security implications of powerful new technology are becoming a bigger driver for market growth, but also arguably a barrier to free collaboration. In some instances, there is evidence that alliances are being formed based more on politics than a symbiotic relationship between national technologies.

Feeling the pressure of other generations

Despite its mystique, quantum computing isn’t the new kid on the block anymore. In fact, it finds itself positioned in an awkward phase of being less established or impactful than its elders and perhaps less new age than some of the computing paradigms coming behind it.

The older generation is, of course, the buzz of 2023 and beyond – artificial intelligence (AI). The world’s attention to the next generations of computing is now firmly focused on AI. From consumer-facing tools to new B2B products and demand for specialist chips from the semiconductor industry, its grasp is somewhat inescapable. Whilst there is an ongoing consensus that AI and quantum will co-exist successfully, from a technology perspective, the attention, funding, and end-user engagement directed towards AI can also be seen as distracting focus from the riskier quantum world.

Longer term though, the future of computing has many more potential strings to its bow. There is growing interest in other alternatives to traditional computing methods. This includes neuromorphic computing and even wetware biocomputing. Whilst these approaches don’t exist in silos from classical computing, quantum, or AI – they will likely put more pressure on quantum to fulfil its promises long term.

Market outlook

Within the quantum computing market, the supportive role of the industry’s parents in academia in government remains essential, relationships with friends in the eco-system are becoming more complicated, and the pressure is on to define itself as a successful generation in the shadow of AI. Overall, the quantum computing market can indeed be seen as going through a teenage phase. However, far from a criticism, this reflects quite how exciting and pivotal an era the sector finds itself in. Quantum computing is growing closer to realising its full potential, pipe dreams have become tangible five-year plans, and more and more players are earning their own money for the first time. Finally, time will pass quicker than many appreciate in the years ahead – don’t blink and miss the quantum computing market grow up, and the chance to leverage its disruptive potential at maturity.