Artificial intelligence (AI) has obviously taken existing computer hardware to a whole new level. The biggest-ever computing leap, however, has yet to come.
That's the looming explosion of quantum computing -- a new kind of platform that's completely different from binary code-based processors used by nearly every kind of computer today. See, quantum computers utilize the unique properties of subatomic particles -- broadly referred to as qubits -- making them shockingly fast. Problems that would take years (if not decades, or even centuries) for conventional AI to solve can be completed in a matter of minutes with a quantum computing platform.
As you might imagine, though, this power can be used for nefarious purposes just as easily as it can be for good. For instance, industry experts widely expect quantum computers to be used to unencrypt what are supposed to be individuals' encrypted connections to the internet, as well as simply figure out user passwords.
The solution to the impending problem? Finding new ways to secure the data, connections, and networks that will soon be very vulnerable.
One surprising company is leading the charge.
An oldie but a goodie
If you guessed Nvidia or Microsoft or one of its AI peers, you didn't guess poorly. These names have certainly been at the forefront of artificial intelligence's ongoing development. Most of them are also working with quantum computing tech in one way or another.
However, that's not the company in question. Rather, it's International Business Machines (IBM 2.70%) -- or IBM -- that will redefine cloud security in the era of quantum-powered hacking and cyberattacks.
Although you've likely heard little about it, this technology company has been pre-solving digital security problems that don't technically yet exist. It's called Quantum Safe™, which is just an IBM arm helping organizations create and execute a plan to defend themselves from quantum-based cyberthreats.
So far, this division's efforts are mostly aimed at encryption, which is where most enterprise-level institutions are most immediately vulnerable. It's worth noting, however, that the company's work has inched its way into the purpose-built hardware realm as well.
For instance, IBM's z16 and z17 AI-capable mainframe computers are the world's first and still-only servers of their type to be "quantum safe" thanks to their built-in Crypto Express security cards.
IBM's got the chops
And it's not like IBM is out of its depth. Remember, IBM was technically one of the very first players to enter the artificial intelligence race when it first introduced a commercial version of its Watson AI platform back in 2013. (although it first turned heads back in 2011, when Watson won on television game show Jeopardy!).
NYSE: IBM
Key Data Points
Watson's since been surpassed by far better solutions -- including IBM's own improvements -- like OpenAI's consumer-facing ChatGPT or Palantir's institution-focused lineup, having never become the commercial success IBM had hoped it would become.
Still, it's not been a waste. The company's learned a lot from its own artificial intelligence successes and flops.
It also merits mentioning that IBM has been working on its own quantum computing tech for some time, and technically speaking, introduced the world's very first commercial quantum computing system back in 2019. Again, it was likely before its time, and not quite ready to provide the sort of computing firepower that was really beginning to be needed at the time; the COVID-19 pandemic didn't help either. Nevertheless, it's a starting point, and IBM has since gone on to build a 1,121-qubit quantum computing chip, which at the time it was unveiled back in 2023 was the world's highest-qubit platform.
More qubits, of course, means more computing power.
Setting the standards
With all that being said, perhaps the chief reason IBM will be the leading name in quantum cybersecurity by 2030 -- when the company expects quantum-based hacks and attacks to really begin ramping up -- isn't so much a developmental one as it is a logistical one rooted in sheer presence. That is, IBM is heavily involved in setting the current and future standards of cybersecurity solutions in the quantum era.
Case in point: The National Institute of Standards and Technology, or NIST.
Just as the name suggests, this organization helps ensure that all companies within a particular industry manufacture their goods in a way that at least makes them reasonably compatible with components that may be used or made by other companies. The end result is production efficiency, and ultimately, a more functional end product.
Well, IBM doesn't just comply with NIST standards. It helps make many of them. For instance, just last year, three of IBM's algorithms for post-quantum encryption became NIST standards that other players in the industry should follow. In other words, the direction this business goes from here will ultimately reflect IBM's solutions.
And it's not just the National Institute of Standards and Technology. IBM is also a member of the Organization for the Advancement of Structured Information Standards, or OASIS. Earlier this year, IBM joined Microsoft, Cisco, Intel, and a handful of other technology outfits to create OASIS's Data Provenance Standards Technical Committee, which will help standardize the handling of digital data in the AI era, which will soon become the quantum computing era.
IBM can't establish these minimum developmental expectations on its own, to be clear; other members of these organizations also contribute ideas and ultimately approve industrywide standards. It's got a seat at the table though, so to speak, and has been able to leverage its name and rich history as a means of exerting influence on the developmental direction that technology industries take.
Worth adding to your watch list, if not your portfolio
It's admittedly difficult to see where things are headed on this front, largely because quantum computer-powered artificial intelligence itself is still so new. Investors don't yet know where it's headed, so it's impossible to predict what it will take to secure it and the cloud-based connections that most users will almost certainly need to utilize it.
There's also no denying IBM hasn't exactly been a prominent player in the global AI revolution to date, making it a little difficult to see it becoming an important name in the business in the near future.
Nevertheless, IBM is quietly doing more on the quantum security front than any other company, and is equipped to remain the leading solutions developer in this area. In light of Dimension Market Research's expectation that the worldwide quantum-based cybersecurity market is poised to grow at an average annual rate of 32% between now and 2034, it wouldn't be crazy to pick up a little long-term exposure to this opportunity by buying a stake in IBM here.
