It's clear by now that recent artificial intelligence breakthroughs powered by Nvidia (NVDA +0.98%) chips will be disruptive to many businesses and governments worldwide. To many, the current AI revolution came out of nowhere. But even before the earth-shaking debut of ChatGPT in November 2022, there were early indications AI was turning a corner.
Is there another new technology at a pre-breakthrough stage today? Quantum computing may be at that point. In fact, quantum computing leader IonQ (IONQ 2.41%) just announced a technological breakthrough that could pave the way toward commercialization of the technology very soon.
NYSE: IONQ
Key Data Points
Quantum vs. traditional supercomputing
While transistor-packed semiconductors such as Nvidia H100s can do a massive amount of computing, each transistor still operates on a binary code of either 1 or 0 to store information.
Quantum computing may disrupt even high-end AI classical computing because it can perform far more computations in a shorter amount of time. When a quantum ion is hit with a laser in a vacuum or electromagnetic field, the laser stimulates the ion's electrons, putting the ion in a dual state of both particle and wave. Measuring all the different probabilities of states between 1 and 0 gives quantum systems the ability to do exponentially more calculations than traditional transistors.
The problem is, of course, that quantum technology is extremely difficult to pull off. But IonQ just hit a new technological milestone last month that may start to turn some heads.
Image source: Getty Images.
Reaching #AQ 35 a year ahead of schedule
On January 25, IonQ issued a press release noting it had achieved what it calls an "#AQ 35" quantum system named Forte one year ahead of schedule.
The term #AQ signifies the number of algorithmic qbits, and was a terminology developed by IonQ in conjunction with the largest quantum industry consortium to measure the computing power of quantum systems.
But each increasing number doesn't indicate a linear advancement -- it's an exponential advancement. For instance, future #AQ 64 systems wouldn't be 35 times as powerful as last year's #AQ 29 system, it will be roughly 34 billion times as powerful! So as IonQ links up more and more qbits in a system -- a very difficult feat -- the total system's power grows by leaps and bounds.
Why #AQ 35 is a bigger deal than #AQ 29
Why is the #AQ 35 system such a big milestone, even relative to last year's #AQ 29 systems? Because #AQ 35 is thought to be the first quantum system threshold sufficiently powerful to outperform traditional computing for certain commercial applications.
Quantum computing is thought to be a superior alternative to classic computing when calculating a number of possibilities, combinations, or permutations so large it would take classical systems years to compute all the various scenarios. So various types of machine learning, optimization (such as in global logistics), complex scenario analysis, and material science and drug discovery applications are prime candidates where quantum may lead to breakthroughs.
While some of these applications may only be cracked by future systems with #AQ numbers in the thousand-plus range, #AQ 35 is thought to be the first threshold where quantum computing outdoes classical computing AI for applications like autonomous driving, anti-fraud detection, and search ad optimization.
So last month's under-the-radar announcement of reaching 35 qbits may be a bigger deal than investors may realize.
Image source: IonQ.
When will quantum make the big leap?
Currently, IonQ has two large customers, which are essentially either research labs or government entities. These include the U.S. Air Force Research Lab and QuantumBasel in Switzerland. IonQ also just inked a collaboration with Seoul National University in South Korea for joint research.
When will quantum computing break through the research stage and make inroads into the private sector, potentially disrupting artificial intelligence winners such as Nvidia?
It's hard to say. IonQ has actually done a few pilot projects with private enterprises, including Airbus for airplane design and Hyundai Motors for autonomous vehicles.
However, while each of these partnerships commenced over a year ago, there haven't been any recent disclosures on any specific breakthroughs.
At least not yet. But with the achievement of #AQ 35 two weeks ago, perhaps the new system will usher in an era of commercial quantum computing and perhaps launch IonQ's stock to more prominence.
Is Nvidia in danger?
Do Nvidia investors have anything to fear? That may be a stretch -- even though IonQ specifically and quantum computing generally have disruptive potential, quantum may only disrupt a portion of all computing. Even IonQ forecasts the quantum computing total addressable market will be "only" $65 billion by 2030.
That's large, but much smaller than the computing industry as a whole. That's probably because quantum may only be cost-effective for applications where it's really needed and traditional computing won't suffice.
Nevertheless, whichever company breaks through first and becomes the leader in this emerging field could make investors fortunes. So investors should closely track IonQ's progress in 2024 on the back of its recent #AQ 35 achievement.
