Quantum Computing: a promising market, starting now
Launched by the French government, the Deeptech Plan celebrates its two year anniversary and is already proving to be a success. The scheme is now accelerating with the objective of investing 2 billion euros into the ecosystem by 2023. By then, a particular subject still little explored by investors will have gained ground: Quantum Computing. Adrien Muller, Principal at Bpifrance Large Venture believes this area already offers many opportunities.
Studied since the early 1980s, Quantum Computing (QC) is a field of research with the potential to revolutionize our approach to computing. Quantum calculators rely on the properties of matter, such as superposition and entanglement, to perform operations on the data. Unlike classical computers that are programmed with binary bits of either 0 or 1 (presence or absence of an electrical signal), quantum calculators use Qubits, which can represent a combination of these values. This makes it possible to perform operations with several inputs at the same time, which exponentially increases the computational power.
So far, computing capabilities have increased steadily, following Moore’s Law and the evolution of semiconductor technologies. But the miniaturization of transistors in conventional processors is reaching its physical limit. The end of Moore’s Law could occur as early as 2025. In this context, quantum computing represents a major opportunity: by changing paradigms, we will be able to circumvent the limitations of today’s architectures and meet the ever-increasing demand for computing power, while also performing operations beyond the reach of conventional computers.
The applications of quantum computing will be numerous and some are already being studied. In healthcare, quantum computing will speed up the discovery of molecules and drugs, while in finance, it will allow risk optimization or fraud detection. In the aerospace sector and in industry in general, it will provide unprecedented simulation capabilities and help optimize design, conception and logistics. Cybersecurity, defence and materials science also offer many potential fields of application.
The market is still in the R&D phase
However, quantum computers are still far from being available to fulfill all these promises. Today, Quantum Computing remains in a R&D phase. Several technologies, derived from decades of basic research funded by governments around the world, are being explored at the same time. Private investors have also recently begun to get involved.
Most of the efforts and investments have been concentrated on the hardware aspects of quantum computing. Large groups such as Google and IBM have invested several hundred million dollars to create the first quantum computers. Even though these machines are functional, they are not yet mature enough to provide real added value compared to traditional computers. For now!
Quantum Software already offers short term opportunities
A consensus seems to be emerging that Quantum Computing will enter a commercial phase between 2025 and 2035 when it reaches the ability to systematically meet the needs of industrial and commercial applications. In the meantime, opportunities to develop technologies — and generate initial revenues — already exist.
Quantum companies can indeed capture commercial opportunities even if the needs of their customers remain mainly R&D. Large groups are gradually becoming aware of the importance of preparing for the arrival of quantum computing and have begun investing by forming teams, launching POCs, using quantum simulators, funding PhDs and building research partnerships.
Pioneer QC startups are key to enable corporates develop their knowledge and capabilities around quantum computing. They participate in the education of their future customers, those who will allow the market to take-off. Naturally, the corporate venture arms of large industrial companies also take part in this movement by supporting and financing startups in the sector: Samsung Catalyst Fund, Airbus Ventures and Robert Bosch Venture Capital are some examples.
International funds such as Atomico, Blackrock, Andreessen Horowitz and Lux Capital have recently joined the investment wave in QC, initially focusing on hardware. In France, Elaia, a Deeptech fund, has also taken positioned itself in the sector with a stake in Alice & Bob. In parallel, the software side of QC is beginning to attract the attention of investors specializing in quantum, such as Quantonation, based in Paris. Software is traditionally much less capital intensive and has a shorter life cycle than hardware. It also makes it possible to connect directly with end-users and develop use-cases, a key argument for any investment in QC. It should therefore quickly gain traction within the investment community.
An opportunity to seize for France
In this emerging market, France and Europe can take a leading position, provided they don’t waste time. French players — large groups and startups alike — are already well positioned in hardware, including Atos, Pasqal, Alice & Bob or C12 Quantum Electronics. Many corporates have also already started multi-years R&D programmes on Quantum, with Total, EDF, Axa and Airbus, actively preparing to integrate quantum computing into their processes. The foundations are in place to build a strong ecosystem in our country.
This is also the conviction of the national strategy for Quantum Technologies, which was presented in January 2021 and plans to put France on the global stage. Quantum Computing is the next big wave of technology and a real opportunity in terms of competitiveness and jobs. Our world leading research labs and engineering schools provide a vibrant and large pool of talent and skills, which we need to leverage and grow. Unlike Artificial Intelligence, an area in which the United States and China had already taken a step ahead when the French AI strategy was launched, the French Quantum Strategy arrives on time. Let’s not miss this opportunity!
For all these reasons, Bpifrance Large Venture is carefully studying the on-going developments in Quantum Computing, which remains emerging but extremely promising.
Do you have a Deeptech or Quantum Computing project to present? Contact us!
