An excellent new study from the Boston Consulting Group (BCG) provides an updated forecast of the value of the quantum computing market. Although overall investment has dropped somewhat in recent years, investment from governments has increased and the technology has progressed significantly.
The headline conclusion from the study is the projection that quantum computing will create $450 billion to $850 billion of economic value by 2040, sustaining a $90 billion to $170 billion market for hardware and software providers. An analysis from competitor McKinsey in their 2023 Quantum Technology Monitor estimates that the industries likely to benefit most from quantum computing stand to gain up to $2 trillion in value by 2035.
In terms of progress of quantum technology since 2021, many milestones have been hit in the meantime. The BCG report rightly points out that the goalposts for assessing the performance of quantum technology are shifting. One of the key success measures for quantum computers is whether they can outperform classical computers. However, classical computers are developing rapidly due to progress in hardware and software such as AI, thereby raising the bar for outperforming classical computers. Aside from assessing performance, it should be noted that the recent progress in AI provides an incentive to invest into quantum computing because of the enormous power consumption of running AI algorithms. The International Energy Agency is expecting global electricity demand from AI, data centres and crypto to rise to as staggering 800TWh in 2026. Quantum technology has already enabled reductions in energy consumption of hardware, for example by leveraging quantum optics for communication between classical processors, and will be able to provide some important computational shortcuts to save energy. While AI threatens to burn up the planet, quantum technology provides some key advantages to save it.
Government funding has increased in recent years. With commercial quantum technology available and the prospect of full scale quantum computers becoming realistic, quantum computing is becoming a national security priority and countries are starting to enter into somewhat of an ‘arms race'. The UK prohibition on the export of quantum computers with more than 34 qubits is an example of how seriously governments are starting to take quantum computing, even if such prohibition does not make much sense on a practical level. Investment in the sector from governments is likely to keep increasing for these reasons.
We also remain confident about our projection that quantum computing will create $450 billion to $850 billion of economic value, sustaining a market in the range of $90 billion to $170 billion for hardware and software providers by 2040.
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