As big artificial intelligence (AI) systems scale up, some investors are already getting excited about what they expect to be the next tech breakthrough: quantum computing. There's a reason for that. Companies developing quantum hardware (which uses qubits instead of the classical computing bits, the binary "ones and zeros" that are the foundation of all software code right now) need a way to run error-free calculations at the subatomic scale.
As it turns out, big AI data centers like the ones that Microsoft (MSFT 0.44%) is building, could do just the trick in allowing a quantum computer to run error-free.
Microsoft recently co-announced a breakthrough with the start-up Quantinuum, which is majority-owned by industrial giant Honeywell (HON -0.95%). Is Microsoft a top bet on this small, research-driven industry?
Microsoft's most promising development to date?
I recently did a write-up on how quantum computers are being developed by using Nvidia's (NVDA 2.81%) accelerated computing and AI systems. Specifically, Nvidia has been partnering with start-ups and researchers, creating a hybrid model of classical computing to help develop next-gen quantum computers. There are big hurdles still sitting along the path to the widespread commercialization of quantum computers. These hurdles include everything from the hardware that creates the qubits used in quantum calculations to the encoding of the software itself. What better company to help overcome these hurdles than Nvidia, with its leading AI platform?
One of Nvidia's top AI system customers is Microsoft, which has been working on building a quantum computer for years. Not coincidentally, it has also been delivering quantum research and development (R&D) services via its Azure cloud platform, including a classical-quantum computer hybrid that helps with quantum computer calculation error correction.
It was this hybrid computer architecture that helped Quantinuum make a breakthrough in computer calculation error correction.
Just as the advancement of classical computers has involved cramming more transistors onto each chip (think Moore's Law), quantum R&D is working on increasing the number of reliable qubits it can run in a quantum machine. But the measurement of those qubits can be disrupted by all sorts of environmental effects. By applying a classical-quantum hybrid that "virtualizes" qubits using powerful AI, Quantinuum said it was able to better analyze its hardware design virtually and reduce the error rate by a factor of 800 when running calculations on its quantum hardware.
Next step: Massive gains for investors?
To be clear, much work still needs to be done by researchers to pave the way to widespread adoption of quantum computers. Besides more R&D on reliable hardware, the software running for those computers needs to be coded. This is why big AI leaders like Microsoft, as well as AI system developers like Nvidia, might actually be the best way for investors to bet on quantum computing right now.
In the meantime, Quantinuum continues with its hardware roadmap, tapping cloud and AI providers like Azure for help along the way.
Quantinuum is privately owned, so it can't be invested in directly. But Honeywell, which owns about 54% of the start-up, could be worth investors' attention. If Quantinuum lands enough victories and brings a quantum computer to market, Honeywell shareholders could reap big rewards. For now, file this away as a long-shot bet, not a for-sure path to quantum computing riches.
Nevertheless, all the big tech companies are in on the quantum computing R&D game, so at this juncture, it's hard to tell if Microsoft, one of its research partners like Quantinuum, or another company is winning the race. For most investors, the best way to bet on this future exponential step-up in computing acceleration could simply be to own a diversified basket of big tech stocks, and let those companies do their thing over the long term.
