Are quantum chips the future of AI?
Welcome to AI Collision 💥,
In today’s collision between AI and our world:
- Quantum is coming, is it wise to have exposure?
- AMD and Nvidia of a decade ago?
- Why are the tech giants all developing this tech?
If that’s enough to get the computer in the quantum realm, read on…
AI Collision 💥
I’ve been covering quantum computing for a while. It’s one of those real game-changer technologies (like AI) that can spark an acceleration of how our world works at unprecedented scale.
But it’s a rocky road, and the companies at the heart of it, are volatile to say the least.
Many had been research companies, private companies, and then in the market euphoria of 2021 many listed on the stock market via the special purpose acquisition company (SPAC) route.
And many tumbled in price through 2022 and 2023. You have to treat these companies for what they are, edge of the bell curve, development, research companies with the potential to change our world.
And when you look through the three most prominent publicly listed pure play quantum companies, the long term chart doesn’t make for some wild viewing.
D-Wave traded under 50 cents in early 2023, IonQ got down to around $3 around the same time and Rigetti stock was languishing at about 30 cents – all in early 2023.
So, today at $11, $25 and $11 respectively is this the beginning or the end for these hugely volatile companies?
Here’s my take on it all…
Remember on 17 December 2024, when I wrote:
…AI and quantum computing go hand in hand – and it will change everything.
In fact, with increasingly good QCs, we’ll see an acceleration in AI – and with an acceleration in AI, we’ll see increasingly good AI.
I bring up quantum computing, because while everyone is still talking about AI, I think that it’s quantum computing companies that could end up being the darlings of the market in 2025.
That was off the back of Google announcing a major development in their own quantum chip program.
And then a little more recently on 24 February when I wrote about Microsoft’s approach to their quantum chip program:
It feels like this quantum story is going to be one of the defining market stories for 2025. And that could mean some of the quantum computing plays in the market end up as some of the most exciting stocks in 2025
Well, the simple question for me comes down to why does Microsoft and Google even have a quantum chip program to begin with?
They’re of course not the only big tech players in quantum. Amazon is developing their “Ocelot” quantum chip and IBM has been developing quantum chips too.
Then there are the other listed players as seen above, D-Wave, Rigetti, IonQ, and then at least a half dozen or so smaller, private companies all working towards the same outcome, fault-tolerant quantum computing chips.
I don’t believe this level of activity, investment and commitment is done without the valid expectation that quantum chips are closer to commercial reality than far away.
It’s why my expectations are that if you have a long term investment horizon, and you have the time to ride the waves and volatility, then buying long term quantum investments today could be like the early days of investing in a company like Nvidia or AMD a decade ago.
It means that companies like Amazon, D-Wave, IonQ, Microsoft, Alphabet, Rigetti, IBM as quantum computing plays may be a smart, long term (and high risk) way to play quantum.
We’ll of course know more over time, but if you’ve got the risk appetite for it, there’s a lot to like about this segment of the market, that I still think is under-appreciated.
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Boomers & Busters 💰
AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).
Boom 📈
- Intel (NASDAQ:INTC) up 28%
- Micron (NASDAQ:MU) up 18%
- Palantir (NASDAQ:PLTR) up 14%
Bust 📉
- Teradyne (NASDAQ:TER) down 14%
- Apple (NASDAQ:AAPL) down 6%
- IBM (NYSE:IBM) down 1%
From the hive mind 🧠
- I wrote you about this a couple of weeks ago. Who makes the AI chips controls them. China clearly wants to be the leader in this space. Taiwan is up for grabs, it’s now on the US to get the fabs built and the job done.
- AI that can match humans at any task… any task? Let’s say what we’re all thinking then shall we? Mmmm, maybe not any task.
- This is a big bet by Intel’s new CEO. Maybe it comes off? The chips (excuse the pun) are stacked against them, but maybe an aggressive new approach is exactly what’s needed.
Artificial Polltelligence 🗳️
Weirdest AI image of the day
What if Nursey Rhymes were in the modern era…
ChatGPT’s random quote of the day
“Programs must be written for people to read, and only incidentally for machines to execute.”
— Harold Abelson
Thanks for reading, and don’t forget to leave comments and questions below,
Sam Volkering
Editor-in-Chief
AI Collision
As someone who has followed the developments within nuclear fusion reactors for over two decades I am perhaps a little sceptical about the development of quantum computing. Nuclear fusion has been just a couple of years away from commercial use over that last two decades. The vast sums of money and research that have been thrown at this project have certainly moved things forward and we now have several working prototypes that have produced more power than they consumed but for short amounts of time that still cannot be sustained to make these machines commercially viable.
The learning curve and technological development spurred on by this has been breathtaking and exponentially more complex than anyone had dared to imagine. I believe that quantum computing is embarking upon a voyage of discovery that will be greatly enhanced by the use of AI. Without powerful AI we have little chance of developing commercially useful quantum computers or contained nuclear fusion systems. I really hope that I am wrong but the scale of quantum is so tiny that even our concept of time and the laws of physics breaks down at these levels, AI might be able to figure it out in the next decade or it might just open up far more questions that need answering and taking humanity in a totally new direction.
Hi Sam, Further to my response – option 3 was my choice – to the question posed in Artificial Pottelligence, I was initially drawn to option 1, but my recent interest in getting to know more about quantum electromechanics (QE), moved my finger to press option 3. I like to think I’m reasonably smart, but QE has me, as well as most others – including some much smarter than me, completely mystified. In one of the on line tutorials I have watched, the professor giving the lecture, started off by saying that the students in the audience were about to be given the opportunity to catch up to the lack of understanding that he (the professor – a life time quantum researcher) has regarding QE! So, although research and our understanding of QE is moving at almost the speed of light – is it a particle or a wave! – I am torn between optimism and the reality that getting quantum computers to the stage that they are widely available at reasonable cost within the next 10 years, is a very big ask.
It’s a lovely sunny day and I am reading my emails with my cat sitting on my lap. Smile 😃 look happy and enjoy life. Nice to speak although not what your comment box is really about
Juliet