Quantum’s big leap puts data centers in the spotlight

After decades confined largely to research labs, Quantum computing may be closer to its breakout moment than many on Wall Street expect. 

The technology, which uses the principles of quantum mechanics to solve problems beyond the ability of the most powerful classical supercomputers, has long been described as futuristic. But rapid advancements have intensified investment in the sector and sparked discussions about how these powerful computers will integrate with industries like the already booming data center sector.

“By the end of the decade, we are confident that we will have machines in data centers that have commercial value,” Zulfi Alam, Microsoft‘s corporate vice president of Quantum, told CNBC.

“I would not be able to say this with this much clarity last year, but this year, I can state to claim that by 2029 you will have machines that will have commercial [value], meaning that they will be doing calculations that classical machines cannot do,” said Alam, who’s leading the development of the company’s scalable quantum machine.

Classical computers use switches, or bits, to either pass through or block an electric current at any given moment to perform calculations. The larger the number of bits, the greater the computing power. Quantum computers, on the other hand, use the ability of some materials at extremely low temperatures to exist in both an ‘on’ and ‘off’ state at the same time. This allows quantum bits, or qubits, to perform the same calculations at vastly greater speeds.

Microsoft, which last year revealed a new quantum computing chip called Majorana, is among the hyperscalers — companies that provide computing capacity that can rapidly expand as demand rises — like Google and Amazon that are investing heavily in the technology.

Patrick Moorhead, CEO and chief analyst at Moor Insights & Strategy, said he is also seeing hyperscalers and platform vendors ramp up investment through cloud access, pricing controls and developer platforms, while the defense sector is investing early in both quantum computing and networking. 

Governments are stepping up their investments too, with China leading with just short of $18 billion in public investment in quantum technology, followed closely by the EU, according to the European Centre for International Political Economy (ECIPE), a think tank.

Most industry roadmaps now place the implementation of these systems in the 2028–2032 timeframe, according to Ellie Brown, quantum computing and cloud economics analyst at S&P Global Market Intelligence.

UBS sees the advantages of quantum computing arriving by the early 2030s, even as company roadmaps are positioning for this earlier, said Madeleine Jenkins, analyst at UBS. “A lot of companies are telling me that 2027 is going to be a big year for quantum in terms of roadmap, in terms of what’s achieved,” she said.

Taken together, these timelines signal a sector moving steadily…