Part I: Mapping the Quantum Revolution
A version of this article, authored by Kike Miralles, was originally featured in SiliconANGLE.
Quantum technology represents one of the most promising opportunities of the coming decade, with several billion dollars already invested in the space, a wide variety of early products reaching the market, and a growing talent influx. Hundreds of startups are now vying for their place in the coming quantum future—many of them with differing views on what that future will look like. And the truth is, it is difficult to predict the evolution of such powerful, foundational technology. Early pioneers of semiconductor technology and classical computing would have had a difficult time imagining today’s world. Nevertheless, that is what venture investors and founders must do.
While the quantum revolution is poised to transform sensing and communications, the most profound—and challenging—frontier lies in quantum computing. Although there are interesting opportunities in quantum sensing, applications in this area often struggle with value capture and market sizes, making venture-scale outcomes elusive. Similarly, quantum communications use cases are mainly predicated on mitigating the security risks posed by quantum computers themselves. With classical paths available to potentially solve many of these security challenges, it remains to be seen whether purely quantum solutions can capture market niches large enough to build venture-scale companies. For investors seeking venture-scale outcomes, the primary arena is in quantum computing.
Quantum computers are expected to solve problems currently intractable for even the world's fastest supercomputers. Their core strengths, efficiently finding hidden patterns in complex datasets and navigating vast optimization challenges, are projected to create hundreds of billions of dollars in value. This value will not be concentrated but rather diffuse across industries. For example, it will enable the design of novel drugs and materials, the creation of superior financial algorithms, and open the door to new frontiers in cryptography and cybersecurity.
At the same time, however, it is important to remember that everything we know today about the future impact of quantum computers is based on what we’ve been able to study about them with existing mathematical and computational capabilities. It seems likely that at least some of the most interesting quantum computing applications will have to wait to be discovered until these machines are a reality at scale, and much more of our engineering and creative talent can focus on making them more useful. For now, however, the focus is on getting them to work and to do so at scale. Thousands of physicists and engineers currently devote most of their waking hours to figuring out how—ensuring that qubits are good enough, that they interact exactly how and when they have to, that extraneous noise and error sources do not get in the way of a successful computation, and that adding more qubits does not ruin it for the others. The good thing is that, despite still being in the early days, progress is accelerating. We’re beginning to gain a line of sight to real commercial value, and the conversation in the ecosystem has shifted from “if” to “when.”
At Intel Capital, we analyze the quantum computing industry through a five-layer stack. While the lines across layers are still blurry, this approach helps us map the value chain and identify where the most critical innovation happens. We are open to investing across all layers, with our investment thesis currently emphasizing the middle of the stack.
- Layer 1: Infrastructure. This is the foundational layer for quantum hardware. Think of extreme cryogenics and the sophisticated vacuum and shielding systems needed to protect these quantum devices.
- Layer 2: Quantum Processing. This is the heart of the machine, where the core quantum ‘magic’ happens. While the landscape of startups and qubit modalities is too vast to list fairly, there are roughly four leading modalities (ions, neutral atoms, superconducting circuits, and photons), with a fifth, silicon spins, following relatively closely. This layer also includes the networking equipment that enables, for example, distributed quantum computing, such as interconnects and quantum memories.
- Layer 3: Control & Read-out. This layer acts as the nervous system of the computer, translating our classical commands into quantum operations, identifying and addressing errors, and reading out the outcome of our computations.
- Layer 4: Middleware. This layer contains the operating system of the quantum computer as well as the supporting software that enables quantum computers to operate—programming languages, IDEs, SDKs, compilers, optimizers, and schedulers.
- Layer 5: Applications. Where quantum computers meet end users. Algorithms and end-user-facing software sit here. This layer remains the toughest one. The main challenge is that, because the machines we have today just aren’t that powerful, it can be difficult to translate these early quantum capabilities to significant and/or scalable customer value. At the same time, just as it happened with digital computing, we expect that over time, much of the value will accrue to this layer.
This stack provides a map for navigating the complex and rapidly evolving quantum landscape. Understanding these distinct layers of innovation—from fundamental infrastructure to end-user applications—is the first step to identifying the most promising opportunities. In our next post, we will use this framework to explore the five most important trends that are accelerating the industry's journey from the lab to commercial reality.
