Barron's: Microsoft and Amazon want to own the quantum ecosystem before it is ready

[Stu_63]

Barron's has a piece arguing that while quantum computing is not ready for prime time, Microsoft and Amazon are already positioning themselves to own the ecosystem around it. I will keep this on the technology side rather than investment talk. The basic idea is that rather than winning purely on their own hardware, both companies want to be the platform everyone else's machines run through, much like their cloud businesses today. That is how both companies came to dominate cloud computing in the first place

Microsoft has opened a new research centre in Maryland connected to DARPA's evaluation work, and is partnering with Atom Computing to deliver a system called Magne to Denmark next year, with $90 million in backing. It is also developing its own quantum programming language and offers access to third party hardware through Azure Quantum. Microsoft's quantum lead Jason Zander said they are looking for better benchmarks to build better hardware. It is a busy roadmap for a technology still in its infancy

Amazon has partnered with neutral atom company QuEra and hosts quantum machines on its Amazon Braket cloud service. Since 2020 it has offered access to seven devices from five different developers, reportedly running them at a loss for the science. Amazon has also built its own error correcting chip called Ocelot, and its AI chief Peter DeSantis has said commercially useful small scale quantum computers could arrive within five to seven years. Amazon tends to play the long game

The article is honest about how early things are. Projections vary wildly, with Boston Consulting Group estimating quantum could create $850 billion of value by 2040 and McKinsey suggesting $1.3 to $2.7 trillion by 2035. QuEra's chief operating officer Yuval Boger was refreshingly blunt, describing today's quantum computers as beautiful, sophisticated toys. QuEra is targeting an error corrected machine by 2028, while IBM aims for a fault tolerant system by 2027

The platform strategy makes sense, because whoever controls access controls the customers, whichever hardware wins. Do you think the cloud giants will end up dominating quantum the way they dominate cloud computing? Or will specialist hardware makers keep their independence?

Microsoft Amazon Quantum Computing 536512Fdwww.barrons.com

[Hannah_36]

Running machines at a loss for the science is a long term bet. Amazon can afford to wait a decade for a market to develop. Smaller companies cannot, which is why they end up partnering with the giants. It is a cheap way to sit at the centre of the industry

[BankHolidayBlues]

Specialist hardware firms will need the cloud giants for distribution. Very few customers will buy a quantum computer outright

Most will try it through Braket or Azure first. Distribution has always been half the battle in tech

[Fiend_Suplex]

The platform play is classic Amazon and Microsoft. They did not need to build the best servers to win cloud computing, just the best place to rent them

Quantum looks set to follow the same path. Hardware makers become suppliers to the cloud. Owning the customer relationship is everything

[Flash79]

IBM targeting fault tolerance by 2027 and QuEra by 2028 sets up a fascinating race. If either delivers, the toy description will need updating quickly

If both slip, the sceptics will have a field day. Deadlines in quantum have a habit of moving. We will see

[VioletBarrel]

A machine delivered to Denmark next year is interesting. Denmark has been investing heavily in quantum, through the Novo Nordisk Foundation among others. Small countries are making big bets here

Copenhagen has a strong quantum history too, going back to Niels Bohr. Denmark punches well above its weight

[ZenithCanopy]

Beautiful, sophisticated toys is the most honest description of quantum computers I have heard from someone inside the industry. Fair play to QuEra's COO for saying it. Toys that cost tens of millions, mind you

[CipherMonk37]

The range between BCG and McKinsey forecasts tells you nobody has a clue about the market size. Trillions either way is a guess dressed up as analysis. Treat all these numbers with caution

[NeuralTrace26]

Microsoft has had a rocky quantum history, with years of promises around topological qubits. Partnering with Atom Computing seems like a more practical route while its own approach matures

Hedging bets is sensible when nobody knows which technology will win. Nobody wants to back the wrong horse. Spreading bets is the safest strategy