On December 9th, the Google Quantum AI Lab, a research consortium on quantum computing that includes Google Research, NASA, and other institutions, announced the creation of Willow, a new chip that promises to exponentially reduce quantum error as the number of qubits increases. This innovation is poised to be a breakthrough for this technology.
However, to fully understand the meaning and impact of this innovation, it is essential to grasp what quantum computing is, how it differs from current technology, and most importantly, what potential commercial applications it may have. We must clarify upfront that, for us, this is (or perhaps we should say “will be”) an investment topic: it is about understanding its scope and how to implement it concretely.
Delving into the technical details of this new computational architecture is a challenging task. In simple terms, quantum computers perform calculations using the postulates of quantum mechanics. This allows them to find solutions to certain problems in extremely short times that traditional computers would take centuries to solve.
The question for us now is: how to invest in this technology. To do so, we must understand which problems current computers cannot tackle. It is important to note that quantum algorithms for solving these problems have already been theoretically defined; what is still missing are the calculators: chips like Willow currently have a limited number of qubits and still face significant construction challenges.
Quantum computing is well-suited to creating cryptographic schemes more robust than the current ones, which has a direct impact on cybersecurity. In the field of simulations, quantum computers can also prove very useful, for example, in simulating certain chemical reactions: imagine the possibility of minimizing the use of a physical laboratory and having a completely virtual one. This would open up many new scenarios; one among many applications is the synthesis of new drugs (including personalized ones) quickly and at much lower costs. There are also applications related to optimization (though not all optimization problems, unfortunately) that can undoubtedly support Machine Learning and/or Artificial Intelligence. D-Wave is a company specialized in providing quantum software systems. Its website offers numerous examples of quantum algorithm applications.
Another way to invest in this new technology is through hardware. Google is certainly not the only player to have created quantum chips like Willow. IBM has also been active in the sector for quite some time: Heron is their latest chip, featuring 133 qubits. And, of course, NVIDIA and Intel are also key players. The fundamental problem in producing these chips lies in error correction or mitigation, as quantum computing errors tend to increase exponentially with computing power (a phenomenon that Willow – according to the announcement – seems to reverse!) forcing computations to be repeated until an exact result is obtained. Producing this hardware is extremely complex and requires significant resources (such as operating at extremely low temperatures, close to zero Kelvin): this is why only large tech giants are currently pursuing it. However, it is not far-fetched to imagine that in the future, once the scalability barrier is broken, this technology could be developed by spin-offs from these large companies, representing promising investment targets.
For now, we believe that this innovation remains in an experimental phase. However, we will continue to monitor it closely, as it may turn out to be the “investment” of a not-too-distant future.
Disclaimer: This article expresses the personal opinion of the contributors from Custodia Wealth Management who authored it. It does not constitute investment advice, personalized consultancy, or an invitation to carry out transactions on financial instruments.
