If one were to believe reports shared by market research and data analytics company GlobalData over the past two years, China has leapfrogged its way in the quantum computing race and is neck and neck with the United States today. Barely 18 months ago, they were five years behind the market leaders!
Find it tough to believe? Well, the report by GlobalData in 2022 noted that China was about five years behind the US, and the recently passed US CHIPS and Science Act will enhance US quantum capabilities while hindering China. It also said that the quantum computing patent space was dominated by the United States.
Now, cut to 2024 and the story appears to have changed drastically. Its latest report shared early in February suggests that China is actually nudging the US for top honors in the quantum computing race. The report says that though the market itself remains small, there is sizable investment from public and private sectors coming through.
Will the AI-ML rush push the case for QC?
Not surprising, given all the talk of artificial intelligence (AI) and machine learning (ML) that requires massive amounts of data and humongous processing power. Quantum computers are known to be using the properties of quantum physics for data storage and remarkably fast computation that are critical to AI/ML-based innovation.
GlobalData pegged the market value of quantum computing to be around $5 billion by 2025 is now predicting that the industry could grow at a CAGR of between 30% to 50% in the five years up to 2030 when the market size would be beyond $10 billion. It also notes that venture capital funding to the industry spiked from $659 million in 2022 to $1.1 billion in 2023.
The US versus China battle royale
While several countries such as the US, UK, Canada, Australia, Israel, Japan and China are developing strategies around quantum computing, the battle royale seems to be between the United States and China. “China has made enormous strides in catching up with the U.S.,” GlobalData Principal Analyst Isabel Al-Dhahir notes in a statement.
“In 2024, the two countries stand almost neck-and-neck, albeit with very different strategies. Private companies lead the way in the U.S., while in China, expertise is increasingly concentrated within state institutions,” she says while adding that growing public investments by both countries is fuelling the competition.
What has the US done thus far?
Washington has already committed $3 billion to fund quantum projects and another $1.2 billion coming from the National Quantum Computing initiative. All of this comes in the wake of President Joe Biden signing the U.S. CHIPS and Science Act in 2022 that authorizes new investments in core quantum research programs.
The author of the report also notes that more funding is likely from some “black budget” projects at the Pentagon though there is little doubt that Washington’s major advantage in the race comes from Microsoft, IBM, Intel and a clutch of start-ups operating in the space.
The Chinese are singing a different tune
The Chinese administration has committed $15 billion to quantum computing over the next five years even as its National Quantum Lab at the University of Science and Technology of China is busy bringing together the domestic expertise on a single platform. In addition, China is also ahead in the quantum communications field via the Micius satellite project.
If anything, the challenge for China in this domain would come from the reduced interest amongst private players. Tech giants such as Alibaba and Baidu have already reduced their budget for quantum computing, with the former even donating its lab and equipment to the Zhejiang University and Baidu following suit as well.
Amidst this ongoing race, there is concern amongst a few industry experts that funds to this sector could dry up, as was the case with artificial intelligence, till the GenAI-led chatbots and its growing use cases made an appearance. Maybe, quantum computing too needs one such success before the funding returns.
