Despite a 50% Decline in Overall Tech Investments, Quantum
Computing Attracted $1.2 Billion from
Venture Capitalists in 2023, According to New Research
by BCG
BOSTON, July 18,
2024 /PRNewswire/ -- Three years ago, Boston
Consulting Group (BCG) published its forecast for the quantum
computing market. Since then, both quantum technology and its
classical computing counterpart have progressed in unexpected ways,
altering the trajectory—though not the overall direction—of this
evolving market.
In its updated analysis titled, The Long-Term Forecast for
Quantum Computing Still Looks Bright, BCG reaffirms its
projection that quantum computing will create $450 billion to $850
billion of economic value globally, sustaining a
$90 billion to $170 billion market for hardware and software
providers by 2040.
"Is quantum computing on the verge of realizing its
transformative potential? The answer, at present, is mixed," said
Jean-Francois Bobier, a partner and
vice president at BCG and a coauthor of the report. "While there
are clear scientific and commercial problems for which quantum
solutions will one day far surpass the classical alternative, it
has yet to demonstrate this advantage at scale. Nonetheless, the
momentum is undeniable."
According to the report, despite a 50% drop in overall tech
investments, quantum computing attracted $1.2 billion from venture capitalists in 2023,
underscoring continued investor confidence in its future.
Governments around the world are also making big investments in the
technology, envisioning a future in which quantum computing plays a
central role in national security and economic growth. Public
sector support is expected to exceed $10
billion over the next three to five years, giving the
technology enough runway to scale.
In its 2021 report, BCG expected the market to mature in three
phases, and this is still the case. The phases are: noisy
intermediate-scale quantum, or NISQ (until 2030), broad quantum
advantage (2030-2040), and full-scale fault tolerance (after 2040).
Despite maintaining confidence in the projected economic value of
quantum computing, BCG's previous assumptions for near-term value
creation in the NISQ era have proven to be overly optimistic,
however, and have been revised.
The NISQ era has not lived up to BCG's expectations because of
two factors: technical hurdles in hardware development are proving
tough to overcome and competition from classical computing has been
fiercer than expected. AI has exceeded expectations in scientific
fields, offering viable alternatives for previously difficult to
solve problems. However, by leveraging analog methodologies,
quantum machines can still deliver tangible value, especially in
materials and chemicals simulations, ranging from $100 million to $500
million a year, during the NISQ era.
Despite being a notable reduction from BCG's 2021 projection,
this adjustment is not anticipated to significantly affect the
market for hardware and software providers. BCG still predicts a
provider market valued between $1
billion and $2 billion by
2030, spurred by three factors:
- Public Sector Support: As it has done in the past with
technologies such as semiconductors, the internet, and GPS, the
public sector is providing substantial support through orders and
grants. BCG estimates that public orders already support over half
the market, and due to existing program announcements and the
geopolitical importance of quantum technologies, this demand should
be sustained for the next three to five years.
- Corporate Investments: Leading corporations are
investing in enterprise-grade quantum capabilities. BCG's 2023
publication on quantum adoption tracked more than 100 active proof
of concept projects among Fortune 500 companies, amounting to
$300 million.
- Supply Chains: Providers can generate revenues by
forming supply chains that involve such equipment as controls,
dilution refrigerators, lasers, vacuums, and software. According to
BCG's research, supply chain spending will make up 5% to 10% of
quantum computing hardware and software revenues this year.
"Our initial optimism about revenue during the NISQ period was
well founded," said Matt Langione, a
managing director and partner at BCG and a coauthor of the report.
"Revenues for tech providers are approaching $1 billion dollars annually. However, the
creation of meaningful value for end users is taking longer.
Despite important signs of progress and well-defined roadmaps,
quantum computing has yet to experience its ChatGPT moment."
Download the publication here:
https://www.bcg.com/publications/2024/long-term-forecast-for-quantum-computing-still-looks-bright
Media Contact:
Eric
Gregoire
+1 617 850 3783
gregoire.eric@bcg.com
About Boston Consulting Group
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SOURCE Boston Consulting Group (BCG)