Artificial intelligence (AI) has captured significant investor interest recently, as the technology promises to boost business efficiency and drive innovation. Tech giants have invested heavily in AI, leading to increased stock valuations. The current $200 billion AI market is projected to reach $1 trillion by the end of the decade, presenting a substantial growth opportunity. However, AI isn’t the only emerging technology with the potential for massive gains. Quantum computing, which utilizes quantum mechanics to solve complex problems currently unsolvable, is also generating significant excitement. Some experts predict that the quantum computing market could add over $1 trillion to the global economy between now and 2035. Companies of all sizes are entering this field, with some, like Rigetti Computing, specializing in quantum computing, and others, such as Microsoft (MSFT -1.80%) and Alphabet, integrating quantum capabilities into their existing portfolios. Microsoft recently shared important quantum computing news with investors.
Quantum vs. Classical Computing: A New Era
Many companies are actively working on quantum computers and related technologies. Quantum computers operate differently than classical computers. This will allow quantum computers to solve problems in minutes that would require thousands of years for classical computers. Quantum computers use qubits to perform complex calculations by employing quantum mechanics, the study of how subatomic particles interact. While classical computers use bits to process data, qubits process data and scale exponentially.
Microsoft’s Breakthrough: A Path to a Million Qubits?
Microsoft announced the development of a new chip designed to make useful quantum computers a reality “in years, not decades.” This is a significant advancement, given that experts have previously estimated that practical quantum computing is still several years away. For example, Nvidia CEO Jensen Huang stated in January that useful quantum computers were probably about 20 years away. The technology giant’s announcement has the potential to change the landscape of the industry.
The tech company introduced Majorana 1, a quantum chip using a new type of material called a topoconductor. This material creates a new form of matter not found as a solid, liquid, or gas. Microsoft claims this material produces a qubit that is stable, fast, and small. The company has so far placed eight of these on a chip that can potentially scale to 1 million.
“Whatever you’re doing in the quantum space needs to have a path to a million qubits,” said Chetan Nayak, a Microsoft technical fellow, in a post on the Microsoft website. “If it doesn’t, you’re going to hit a wall before you get to the scale at which you can solve the really important problems that motivate us.”
Microsoft is working to scale its chip, with its unique qubit design possibly representing a pathway to dominance in the quantum computing industry. It remains too early to predict whether Microsoft will succeed in reaching the quantum computing goal with its new chip. However, its competitors also face similar uncertainty and risks as quantum computing is still in its early stages. Microsoft has a strong track record of established business operations, ranging from software to cloud computing, and they have also seen tremendous growth within their AI sector, recently reaching an impressive annual revenue run rate for their AI business, estimated at $13 billion, representing a 175% increase year-over-year. This makes Microsoft an appealing investment for both cautious and aggressive investors. This stock gives investors access to a stable, proven company while simultaneously offering the potential for significant growth in the rapidly expanding field of of quantum computing.
