Quantum’s big leap puts data centers in the spotlight
Microsoft’s Majorana 1 quantum computing chip
Microsoft
Quantum computing, which has been largely confined to research labs for decades, may be closer to its breakout moment than many on Wall Street expected.
The technology, which uses the principles of quantum mechanics to solve problems beyond the capabilities of the most powerful classical supercomputers, has long been described as futuristic. But rapid advancements have intensified investment in the sector and sparked debate about how these powerful computers will integrate with industries such as the already booming data center sector.
“We are confident that by the end of the decade we will have machines of commercial value in data centers,” said Zulfi Alam. MicrosoftQuantum’s corporate vice president told CNBC.
“Last year I could not say this so clearly, but this year I can say that you will have commercial machines by 2029. [value]This means they will perform calculations that classical machines cannot do,” said Alam, who is leading the development of the company’s scalable quantum machine.
Classical computers use switches, or bits, to pass or block electrical current at any given moment to perform calculations. As the number of bits increases, the computational power also increases. Quantum computers, on the other hand, use the ability of some materials to be both ‘on’ and ‘off’ at the same time at extremely low temperatures. This allows quantum bits, or qubits, to perform the same calculations at much higher speeds.
Microsoft, which unveiled a new quantum computing chip called Majorana last year, is among hyperscalers (companies that provide computing capacity that can expand rapidly as demand increases). Google And Amazon They invest heavily in technology.
Hyperscalers and platform vendors are increasing their investments through cloud access, pricing controls and developer platforms, while the defense industry is seeing early investments in both quantum computing and networking, said Patrick Moorhead, CEO and principal analyst at Moor Insights & Strategy.
According to the European Center for International Political Economy (ECIPE), a think tank, governments are also stepping up their investments; China leads the way, with $18 billion in public investment in quantum technology, followed by the EU.
Most industry roadmaps now place the implementation of these systems in the 2028-2032 timeframe, according to Ellie Brown, a quantum computing and cloud economics analyst at S&P Global Market Intelligence.
UBS analyst Madeleine Jenkins said UBS will see the benefits of quantum computing in the early 2030s, although the company’s roadmaps position it accordingly earlier. “A lot of companies are telling me that 2027 is going to be a big year for quantum in terms of the roadmap and the achievements,” he said.
Taken together, these timelines signal an industry steadily moving toward real-world deployment, while also raising important questions about how today’s data infrastructure must evolve to support it.
Changing energy demand
UBS analysts led by Jenkins said in a 103-page report published in January: The industry is close to completing a quantum computer that could cost tens of millions of dollars to build but is capable of solving a problem in 200 seconds that would take a traditional supercomputer 10,000 years.
When it comes to the impact on the data center ecosystem, experts told CNBC that quantum could potentially reduce the energy needs of power-hungry facilities and also reduce the workloads required for AI training.
Last year I could not say this so clearly, but this year I can say that you will have commercial machines in 2029. [value]In other words, they will make calculations that classical machines cannot do.
Zulfi Alem
corporate vice president of Microsoft’s Quantum
In terms of energy, quantum computing would require “a fraction of what a data center uses,” Jenkins said.
“What matters is time; if you’re taking the same problem that would take thousands and thousands of… hours and replacing it with a quantum computer that would take seconds or minutes, then obviously you need a lot less energy,” he said.
Microsoft’s Alam also noted the lower power requirements of quantum computers, emphasizing that Majorana 1 “demonstrates more power than the entire computation of the entire planet.” [in] It is in the palm of your hand and does not overheat. It’s getting cold.”
While quantum technology is advancing rapidly, it is unlikely to replace classical computing housed in data centers in the near term.
“Ideally, the overall efficiency of the problem-solving workload will drop, but it won’t be a complete replacement,” S&P’s Brown said.
Microsoft’s Alam emphasized that quantum systems will not work in isolation. “A quantum machine is not an independent entity. It is a hybrid tool. It is a quantum accelerator that needs a high-performance computer very close to it,” he said.
Moorhead of Moor Insights & Strategy also noted that if quantum scales, it will likely play a complementary role, adding a new class of “dedicated infrastructure” to data centers and shifting facility design toward “quantum pods,” which come with their own power and thermal needs.
“This will not replace AI data center expansion as the dominant energy driver in the short term, but will add special load and operational complexity,” he told CNBC via emailed comments.
Ultimately, the shape of demand is likely to change, but not the scale; The AI boom remains the key driver of demand for facilities.
Obstacles ahead
Building this type of system in real data center environments will not be easy and may require entirely new purpose-built facilities.
Only a handful of specialized quantum computers currently deployed Quantum vendors are currently brainstorming a set of industry standards to facilitate broader adoption, according to Brown and S&P analyst Kelly Morgan.
“There’s still a significant amount of specialized work that needs to be done to integrate quantum systems into data centers,” Brown said, adding, “We don’t have some of the quantum capabilities to use this and deploy it effectively.”
But in the long term, he foresees “a nice interaction between quantum and some other data center areas, including artificial intelligence, where the two can work together to solve problems.”
These hurdles reinforce the need for continued investment in data center infrastructure over the next decade, said Tim Adams, president and CEO of the Institute of International Finance.
“Data centers are essential to driving technological transformation forward and should be considered as one of a number of possible investments on the path to the very transformational successes we are sure to see over the next decade.” Adams told CNBC.
This phase has already begun, with Brown pointing to a burst of merger and acquisition activity aimed at developing the capabilities needed for the commercial phase of quantum.
“Mergers and acquisitions have been huge in the last three months,” Brown said, noting the quantum firm’s several acquisition announcements. IonQ. “There’s been a lot of positioning in space to help not only develop quantum capability and technology, but also to help control the supply chain a little bit.”
Aside from the opportunities offered by quantum computing, data security is arguably the biggest when it comes to risks.
According to UBS, a powerful enough quantum computer could break existing encryption methods, meaning security systems would no longer be reliable. The Swiss bank’s report warns that companies will have to implement new quantum-secure encryption techniques and that investment in them should begin within the next few years.
Despite this increase in investment, Microsoft’s Alam warned that the road ahead will not be easy. He predicted there would be numerous challenges as quantum machines come online, from meeting performance benchmarks to solving complex technical problems, saying they all need to “come together at the right time” for the real magic to happen.
