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Despite a 50% Decline in Overall Tech Investments, Quantum Computing Attracted $1.2 Billion from Venture Capitalists in 2023, According to New Research byBCG

BOSTON, July 18, 2024 /PRNewswire/ -- Three years ago, Boston Consulting Group (BCG) published its forecast for the quantum computing market. Since then, both quantum technology and its classical computing counterpart have progressed in unexpected ways, altering the trajectorythough not the overall directionof this evolving market.

In its updated analysis titled, The Long-Term Forecast for Quantum Computing Still Looks Bright, BCG reaffirms its projection that quantum computing will create $450 billion to $850 billion of economic value globally, sustaining a $90 billion to $170 billion market for hardware and software providers by 2040.

"Is quantum computing on the verge of realizing its transformative potential? The answer, at present, is mixed," said Jean-Francois Bobier, a partner and vice president at BCG and a coauthor of the report. "While there are clear scientific and commercial problems for which quantum solutions will one day far surpass the classical alternative, it has yet to demonstrate this advantage at scale. Nonetheless, the momentum is undeniable."

According to the report, despite a 50% drop in overall tech investments, quantum computing attracted $1.2 billion from venture capitalists in 2023, underscoring continued investor confidence in its future. Governments around the world are also making big investments in the technology, envisioning a future in which quantum computing plays a central role in national security and economic growth. Public sector support is expected to exceed $10 billion over the next three to five years, giving the technology enough runway to scale.

In its 2021 report, BCG expected the market to mature in three phases, and this is still the case. The phases are: noisy intermediate-scale quantum, or NISQ (until 2030), broad quantum advantage (2030-2040), and full-scale fault tolerance (after 2040). Despite maintaining confidence in the projected economic value of quantum computing, BCG's previous assumptions for near-term value creation in the NISQ era have proven to be overly optimistic, however, and have been revised.

The NISQ era has not lived up to BCG's expectations because of two factors: technical hurdles in hardware development are proving tough to overcome and competition from classical computing has been fiercer than expected. AI has exceeded expectations in scientific fields, offering viable alternatives for previously difficult to solve problems. However, by leveraging analog methodologies, quantum machines can still deliver tangible value, especially in materials and chemicals simulations, ranging from $100 million to $500 million a year, during the NISQ era.

Despite being a notable reduction from BCG's 2021 projection, this adjustment is not anticipated to significantly affect the market for hardware and software providers. BCG still predicts a provider market valued between $1 billion and $2 billion by 2030, spurred by three factors:

"Our initial optimism about revenue during the NISQ period was well founded," said Matt Langione, a managing director and partner at BCG and a coauthor of the report. "Revenues for tech providers are approaching $1 billion dollars annually. However, the creation of meaningful value for end users is taking longer. Despite important signs of progress and well-defined roadmaps, quantum computing has yet to experience its ChatGPT moment."

Download the publication here: https://www.bcg.com/publications/2024/long-term-forecast-for-quantum-computing-still-looks-bright

Media Contact:Eric Gregoire +1 617 850 3783 [emailprotected]

About Boston Consulting GroupBoston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

SOURCE Boston Consulting Group (BCG)

Excerpt from:
Quantum Computing On Track to Create Up to $850 Billion of Economic Value By 2040 - PR Newswire