Ask HN: How are quantum computing companies making money? | Hacker News Reader

Ask HN: How are quantum computing companies making money?

44 pointsGooblebrai41 comments

I see many companies raising VC but I'm not entirely clear what the business model is at the moment. Do they have business applications that can be sold already?

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Same way that fusion power companies are making money: they don't.

Everyone is sinking tons of money into these ventures with the hope that they succeed before their competitors, and get that sweet sweet first mover benefit.

Always a bit weird, you could also just sit on that money and invest into a company once it successful instead of getting a first-mover disadvantage [1].

[1]: https://en.wikipedia.org/wiki/Law_of_the_handicap_of_a_head_...

Depends on the industy, the difficulty of the problem, the ease of replicating a solution - and the barriers you can erect getting there first.

That theory clearly is from before efficient patent enforcement and licensing. If you do the research, you get a ton of patents so you can charge the companies that are actually successful at putting your work in a marketable solution.

And then nobody would have the successful company.

There isn’t any quantum computer currently that can function beyond a few rounds of computation before decoherence occurs, ending the ability to compute without error. All quantum computer projects are still in the research phase, and trying to overcome the decoherence issue. Until then, like fusion, it’s a purely research funded industry.

This is my understanding. Which brings me to the part I do not understand, which is, what in the world is D-Wave selling? they claim to be selling "quantum computing systems, software, and services". Are they selling purely to researchers or something? Who is buying quantum computers that cannot compute anything faster than a traditional computer?

D-wave is somehow special case. What they have achieved and working is not what comes in your mind when you say quantum computer. They’re selling access to a special kind of quantum machine called a quantum annealer. It’s not like the general-purpose quantum computers that big companies like IBM are working on. Instead, it’s really good for specific problems, especially in optimization – like figuring out the most efficient way to do something.

Who’s buying it? Well, it’s not just for researchers. Companies interested in solving complex optimization problems are potential customers. These could be businesses in logistics, finance, or even AI. The key here is that D-Wave’s tech is handy for certain tasks, but it’s not a do-it-all kind of quantum computer. Think of it as a specialized tool for specific jobs, rather than a Swiss Army knife.

I pointed out the Quantum Annealing as a special case in a different thread. I think that it's the only one of the Quantum computing technologies that has any future.

I also believe that future isn't unlimited, as I strongly suspect someone will figure out an algorithm on a conventional computer that can simulate it efficiently, thus negating its advantage.

They are dedicated high-risk investment vehicles.

Think of them as research centers in search of grants. People investing in them accept a short/medium/long term loss, betting that it will turn a large profit if it works (i.e. if one entity wins over the problem of noise).

High risk and reward.

I want to get into quantum computing, but I keep coming back to the idea that most of our problems are human problems, not quantum problems. At least with classical computers, we can build tools that help to solve the human problems. Eg: connecting people, facilitating better communication, sharing knowledge. With quantum computers, it's not clear how you map a human problem to a problem that quantum computers would be good for, so I lose interest.

The business model is raising VC money and using it to do R&D that will show results good enough to be able to raise more VC money...

Striking similarities to biotech.

Hahaha! I agree that both are high risk, high reward. The difference is that biotech companies semi-regularly produce products that large numbers of people use and derive benefits from. Not saying that won’t happen with Quantum Computing, but QC has felt like was 10 years away for about 10 years now.

The difference is of course that there are biotech applications. There won't be any QC applications for decades to come.

If you believe any company today doing QC stuff will earn money ever, you're playing the really long game.

> There won't be any QC applications for decades to come.

How do you know this?

Some of the main players, like IBM, are not VC-funded companies.

Their business there is likely pursuing foundational patents to license.

Also strikingly similar to Biotech!

That depends on the company, some are making money by doing research the same way universities do (by applying for grants from governments). Some are essentially selling hype (we're building this cool thing, get in on the ground floor). Some are selling expertise in classical computing as consultancies, especially those focussed on optimization. Some are probably straight-up lying to people.

That’s “how are they funded”, whereas I think the poster’s question of “how are they making money” is more about “what’s the business / profit model”?

The business model is “get funding, use it up, get more”. It’s the same playbook as self-driving car companies.

Thats kinda obvious I think. Either they build a quantum computer and make buckets of money, someone else builds a quantum computer and they make slightly smaller buckets of money, or no one builds a quantum computer and they fail.

Uhm, two things I just don't understand are:

1: What is programming a quantum computer like?

2: What are the useful applications of a quantum computer?

I know everyone always says encryption, which implies that a quantum computer can run calculations in parallel; specifically, significantly more orders of magnitude more parallel than a conventional, multicore / multi-CPU computer.

But beyond that?

> what is programming a quantum computer like?

You compose a series of gates that manipulate the state qbits to perform calculation. My understanding is that these gates can be abstracted in a somewhat familiar programming language environment.

I've got a very rudimentary understanding, my crude summary would be: it's basically applied linear algebra, leveraging the properties of superposition to perform some types of computations more efficiently. Namely, reducing some search spaces to sqrt n.

This video is a good hands on intro:

https://youtu.be/F_Riqjdh2oM

I think the first real applications will be, well, simulations of quantum systems. Right now classical supercomputers cannot model complex molecules, but are still better than quantum computers, where you have to take care of the logical qubits they provide. Modelling this can help finding better fertilizer, new drugs, etc.

Here is a good summary in comic form. https://www.smbc-comics.com/comic/the-talk-3

They are research organizations that hope to be bought by a larger company once they have something that works. It's the same model as in biotech. Startups do the research to then get bought by the few giants who don't do much research themselves. Almost none of the startups are even trying to become a real business.

Their business model is selling dreams of future profits to VCs. Or, if the VCs are knowledgeable enough, the business model is selling dreams of future profits to unsophisticated investors at a future IPO.

Amazon found a way to make money ;) https://aws.amazon.com/braket/

IBM, D-Wave, and others have press releases about consulting and R&D partnerships. For example, Volkswagen: https://www.vw.com/en/newsroom/future-of-mobility/quantum-co...

TBH it doesn't seem practical - I don't know if this was to boost VW's image or to retain researchers and management (consider how much Facebook gave David Marcus to think about Libra for a couple years). But if you're the quantum hardware provider / SaaS then you'll take the call.

I don't know, D-Wave looks like a special case, because they use quantum annihilation, which for me seems actually quite useful. I think (I am an outsider here) the newest papers from D-Wave show an advantage, but this is doubted. Nevertheless a lot of companies might want to be familiar with the new tech, to use it the moment D-Wave has a more powerful machine. For me, it looks like I could actually use quantum annihilation for solving some logistics problems, I guess Volkswagen seem to take the same guess.

I believe it's quantum annealing. Not a physicist but my understanding was it can be used for some problems but not universal quantum computing.

Yes, sorry, quantum annealing. Exactly, not universal, but I think quite useful, if really faster. I really can't judge if this is reality or not.

Maybe it’s just a German Big Company thing? Deutsche Bahn also likes to spend money on insane “innovation” gimmics which have no path towards success.

They're not profitable. The business model will be selling machines to cryptographically adverse intelligence agencies and maybe some biotech companies if the quantum computers actually work.

As someone who has no idea of these things, I have always causally wondered what the effects of a breakthrough in quantum computing would be:

1) Does secure online browsing become impossible? 2) Does the entire crypto currency market evaporate?

Also would it be more advantageous / profitable for that country to publicize it or keep it a secret?

The search keyword to learn more is "post-quantum cryptography"

RSA and ECC cryptography could be broken, but (with a probably rocky transition period) we could move to other algorithms which are still secure.

Crytocurrency I'm not sure about.

I suspect probably keeping it secret - announcing it would push everyone to move from crypto you can break to crypto you can't.

The smart companies are doing projects for the government, getting contracts, publishing papers [or not ;-)], filing away patents. They are small and almost purely focused on research, with little-to-no marketing staff or budget.

The dumb companies are blowing through VC money trying to speedrun a quantum version of webvan.com.

It's a case of grift by continual fundraising on (mostly) false cybersecurity fears. There are no really useful quantum computers and there won't be because it's mostly a scam. Feel free to downvote me but if you search hard enough, past the marketing hype and billions continually poured into research you come to this truth.

I think the majority of them are just praying that they are lucky enough get picked up by VCs

They all make money in an infinite number of wordlines

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