NVIDIA CEO causes quantum stocks and confidence to tumble

The quantum computing sector, much like the qubits it aims to harness, appears to be fragile and prone to volatility. Shares of several publicly traded quantum companies took a significant hit following remarks made by Nvidia CEO Jensen Huang at CES, where he expressed a rather sobering perspective on the timeline for practical quantum systems.

During a Q&A session with financial analysts at the electronics mega-conference, Huang stated that the industry remains five to six orders of magnitude away from achieving the qubit count necessary for functional quantum computers. He predicted it would take at least another two decades to cross that threshold.

“If you said 15 years for very useful quantum computers, that would probably be on the early side,” Huang noted. “If you said 30, it’s probably on the late side. If you picked 20, I think a whole bunch of us would believe it.”

Huang’s pragmatic outlook seemed to cast a shadow over the quantum sector, triggering steep declines in stock prices across the industry. Companies such as D-Wave, Quantum Computing Inc, Rigetti, and IONQ all saw their valuations fall by nearly 50% when markets reopened. The only exception among the prominent quantum firms was UK-based Arqit Quantum, which managed to avoid a 50% drop but still saw its value decrease by around 30%.

This downturn is part of a broader trend of difficulties that have plagued the quantum computing industry in recent months. The start of 2024 saw the sector already on shaky ground, as venture capital investment in quantum technologies dropped by 50% in 2023. The hype surrounding generative AI appears to have diverted both attention and funding away from quantum initiatives.

Companies like D-Wave and Rigetti faced additional challenges, including warnings of potential delisting from US stock exchanges after their share prices fell below the critical $1 threshold. These financial pressures have exacerbated existing concerns about the viability and timeline of quantum advancements.

Adding to the sector’s woes, a study published in 2023 demonstrated that a single Nvidia GPU outperformed certain hypothetical quantum setups in tasks traditionally viewed as quantum computing strongholds. This further dampened enthusiasm for the technology, as it suggested that classical computing may still hold the upper hand in many areas where quantum was expected to excel.

DARPA’s assessment, released the same year, delivered mixed results regarding quantum computing’s ability to solve problems that are unsolvable by classical machines. The report underscored that, despite ongoing advancements, quantum computers have yet to prove a clear, practical advantage over their classical counterparts.

Even the most advanced quantum machines, touted as being too complex to simulate using classical hardware, continue to struggle with reliability. Frequent errors in their computations highlight the ongoing need for progress in quantum error correction—a critical area that must be addressed before quantum systems can deliver on their promised potential.

In light of these challenges, Huang’s assessment seems less like pessimism and more like realism. While the vision of quantum supremacy remains alluring, the path to achieving it is proving to be longer and more arduous than many had anticipated.