How are quantum computing companies making money?
I see many companies raising VC but I'm not entirely clear what the business model is at the moment. Do they have business applications that can be sold already?
Same way that fusion power companies are making money: they don't.
Everyone is sinking tons of money into these ventures with the hope that they succeed before their competitors, and get that sweet sweet first mover benefit.
There isn’t any quantum computer currently that can function beyond a few rounds of computation before decoherence occurs, ending the ability to compute without error. All quantum computer projects are still in the research phase, and trying to overcome the decoherence issue. Until then, like fusion, it’s a purely research funded industry.
They are dedicated high-risk investment vehicles.
Think of them as research centers in search of grants. People investing in them accept a short/medium/long term loss, betting that it will turn a large profit if it works (i.e. if one entity wins over the problem of noise).
High risk and reward.
I want to get into quantum computing, but I keep coming back to the idea that most of our problems are human problems, not quantum problems. At least with classical computers, we can build tools that help to solve the human problems. Eg: connecting people, facilitating better communication, sharing knowledge. With quantum computers, it's not clear how you map a human problem to a problem that quantum computers would be good for, so I lose interest.
The business model is raising VC money and using it to do R&D that will show results good enough to be able to raise more VC money...
Striking similarities to biotech.
That depends on the company, some are making money by doing research the same way universities do (by applying for grants from governments). Some are essentially selling hype (we're building this cool thing, get in on the ground floor). Some are selling expertise in classical computing as consultancies, especially those focussed on optimization. Some are probably straight-up lying to people.
Uhm, two things I just don't understand are:
1: What is programming a quantum computer like?
2: What are the useful applications of a quantum computer?
I know everyone always says encryption, which implies that a quantum computer can run calculations in parallel; specifically, significantly more orders of magnitude more parallel than a conventional, multicore / multi-CPU computer.
But beyond that?
They are research organizations that hope to be bought by a larger company once they have something that works. It's the same model as in biotech. Startups do the research to then get bought by the few giants who don't do much research themselves. Almost none of the startups are even trying to become a real business.
Their business model is selling dreams of future profits to VCs. Or, if the VCs are knowledgeable enough, the business model is selling dreams of future profits to unsophisticated investors at a future IPO.
TBH it doesn't seem practical - I don't know if this was to boost VW's image or to retain researchers and management (consider how much Facebook gave David Marcus to think about Libra for a couple years). But if you're the quantum hardware provider / SaaS then you'll take the call.
They're not profitable. The business model will be selling machines to cryptographically adverse intelligence agencies and maybe some biotech companies if the quantum computers actually work.
As someone who has no idea of these things, I have always causally wondered what the effects of a breakthrough in quantum computing would be:
1) Does secure online browsing become impossible?
2) Does the entire crypto currency market evaporate?
Also would it be more advantageous / profitable for that country to publicize it or keep it a secret?
The smart companies are doing projects for the government, getting contracts, publishing papers [or not ;-)], filing away patents. They are small and almost purely focused on research, with little-to-no marketing staff or budget.
The dumb companies are blowing through VC money trying to speedrun a quantum version of webvan.com.
It's a case of grift by continual fundraising on (mostly) false cybersecurity fears. There are no really useful quantum computers and there won't be because it's mostly a scam. Feel free to downvote me but if you search hard enough, past the marketing hype and billions continually poured into research you come to this truth.
I think the majority of them are just praying that they are lucky enough get picked up by VCs
They all make money in an infinite number of wordlines