Nvidia (NVDA 4.43%) CEO Jensen Huang ignited a firestorm last month with his comments about quantum computing. At a question-and-answer session with analysts the day after his keynote address at the Consumer Electronics Show, Huang said that useful quantum computers might not be available until another 20 years.
Not everyone agrees with Huang's view, though. Billionaire philanthropist and Microsoft (MSFT 2.17%) co-founder Bill Gates thinks quantum computing could be ready for prime time within three to five years. Could Nvidia be in trouble if he's right?
NASDAQ: NVDA
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Gates: Nvidia's Huang "could be wrong"
To be clear, Gates didn't argue strongly against Huang's timeline for quantum computing. However, he sounded much more optimistic than Nvidia's founder and CEO in a recent interview on Yahoo Finance's Opening Bid podcast.
Gates said, "There is the possibility that [Huang] could be wrong." He added, "There is the possibility in the next three to five years that one of these techniques would get enough true logical qubits [the basic unit of information in quantum computing] to solve some very tough problems."
Why does Gates think powerful quantum computers could be available much sooner than Huang does? Although he no longer runs Microsoft and isn't on its board, Gates still spends a lot of time with the company's product development teams. He told Yahoo! Finance that he "regularly" reviews Microsoft's quantum computing work and is "quite impressed with it."
Microsoft announced in November 2024 that it's working on "the world's most powerful quantum machine." Mitra Azizirad, Microsoft's president and COO of strategic missions and technologies, recently wrote that 2025 is "the year to become Quantum-Ready."
Alphabet's (GOOG +1.49%) (GOOGL +1.50%) Google unit is also making significant progress in developing quantum computers. Google's new Willow chip can reduce errors exponentially as more qubits are used. The company thinks it could have a useful quantum computer ready by the end of the decade.
Trouble for Nvidia?
Could Nvidia be in trouble if Gates is correct that powerful quantum computers could be on the way soon? It's a definite maybe.
DA Davidson's Gil Luria told Investors Business Daily, "Once quantum computing becomes powerful enough, it will likely replace some of the uses of GPU data centers with a much smaller footprint and much faster computation." He added, "That means quantum computing is an existential threat to Nvidia."
Quantum chips certainly hold the potential to be much faster than Nvidia's GPUs for specific applications. As a case in point, Google's Willow chip performed a calculation in less than five minutes that would take the world's fastest supercomputers 10 septillion years to handle.
At a minimum, a rapid advance in quantum computing could create uncertainty about Nvidia's growth trajectory. Suppose big companies such as Google and Microsoft and/or smaller players including D-Wave Quantum (QBTS 6.75%) and Rigetti Computing (RGTI 6.54%), launch quantum computers with broad capabilities within the next five years. Even if those quantum computers only rival Nvidia in niche areas, investors could begin to wonder how long it might take for a more widespread disruption to happen.
A two-edged sword
Nvidia shareholders probably shouldn't worry too much at this point, though. For one thing, as Gates admitted, Huang's longer timeline for the adoption of quantum computing could be right.
Also, quantum computing could be a two-edged sword that cuts both ways for Nvidia. Sure, the company's GPUs could face increased competition in some areas if quantum chips make a huge splash. On the other hand, the demand for hybrid systems that use both GPUs and quantum chips could increase significantly. Nvidia is already positioning itself for this scenario with its CUDA-Q platform.
I don't view quantum computers as an existential threat to Nvidia. Instead, I think the technology will present both positives and negatives for the company. As is often the case, challenges create opportunities.
