MAJOR INVESTMENTS HAVE NOT MATERIALIZEDIN 2022 AMID ECONOMIC UNCERTAINTY AND THE
BOOM OF INVESTMENTS IN 2021
August 2022

In 2022 the frenzy of investments into quantum hardware vendors slowed down, which TBR believes was due in part to a
localized saturation of investments in 2021 as well as venture capitalists’ shift in focus toward quantum software, fromvendors pursuing use-case applications to quantum algorithm development platforms to post-quantum cybersecurity.
With the spinoff of SandboxAQ from Google, the company raised an undisclosed nine-figure venture capital round from anumber of large investors such as Section 32, T. Rowe Price and Breyer Capital. Aside from SandboxAQ, investments intoquantum computing have been more modest, such as the $60 million Series A funding round for Terra Quantum and its
Quantum-as-a-Service platform and the $33 million Series B funding round for Classiq, a quantum software platformcompany.

SCIENTIFIC ADVANCEMENTS
Scale: IBM and Rigetti Computing both had notable advancements in the scalability of quantum computers during thequarter. IBM was able to produce and release its 127-qubit, Eagle quantum processing unit (QPU), which is the largest
QPU on the market. Rigetti released a beta version of an 80-qubit system, created by linking two 40-qubit QPUs together
in a modular design. If fidelity and speed do not suffer with this new system, it could pave the way for significant
scalability in qubit count. Ion-trap systems are less adept in this area, with IonQ systems maxing out at 32 qubits andQuantinuum systems at 20 qubits.
Quality: Quantinuum has the highest-quality systems from theperspective of quantum volume (QV) as it achieved 4096 QV on its

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run a circuit with a width (qubit count) and depth (gate count) of
12. This is by far the highest QV achieved by a quantum
computing (QC) vendor whose results have been publicized andverified. For reference, the next highest QV achieved was IBM’s
Falcon r10 processor, which reached a quantum volume of 512(width and depth of 9) in May.
Speed: In terms of speed, the third critical dimension of QC performance, IBM had the most important announcementwith a proposed new quantum computing performance metric, Circuit Layer Operations Per Second. Previously, there wasno standardized way to compare QC speed, despite its importance to overall system performance.

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QUANTUM COMPETITORS STILL ALLY TO ACCELERATE ECOSYSTEM DEVELOPMENT WHILE
ATYPICAL CUSTOMERS BEGIN EVALUATING QUANTUM’S POTENTIAL
Vendors, academic institutions, governments and large enterprises forge various alliances for scientific discovery,skills development, algorithm development, and use-case exploration. Quantum-native skills are in short supply,
leading to the creation of alliances with academic institutions. The industry is recognizing that despite the high-stakes
competition, collaboration is key for the technology to reach the quantum advantage, an outcome beneficial to all.
Examples of this can be seen with Quantinuum joining the IBM Quantum Ecosystem in February to grow theoverarching ecosystem, despite the two hardware vendors being rivals. Other examples of this are with vendors suchas Rigetti, IonQ and Xanadu partnering with hyperscalers, which are developing quantum hardware in parallel.
EY contacted 1,516 U.K. executives, of whom 501 were qualified to complete its survey on quantum computing. Sixtyfive percent of the 501 respondents stated their organizations had high interest in quantum. In terms of whenquantum would play a significant role in their industries, 18% believed it would arrive in 2022, 27% estimatedbetween 2023 to 2025, and 33% believed it would occur between 2026 and 2030. The remaining 4% felt it would
occur after 2035.
Savvy enterprises recognize the potential advantage quantum will bring to their businesses. For example, the virtualCommercialising Quantum symposium held by The Economist included participants from diverse industries such as

media and advertising, who viewed speedier insights on human emotion as vital to ongoing advertising efforts toknow the customer and anticipate buyer sentiment. The fact that advertisers are evaluating quantum for searchalgorithm use cases suggests to TBR a second tranche of quantum interest is developing alongside the traditional use
cases commonly discussed for optimization, logistics, finance, security and materials science.

INCREMENTAL ADVANCEMENTS CONTINUE DUE TO SCIENTIFIC DISCOVERIES AND ENHANCEDADVISORY SERVICES PORTFOLIOS SERVING EMERGING BUSINESS INTEREST

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MULTIPLE NATIONS VIE TO ESTABLISH QUANTUM EXPERTISE FOR ECONOMIC VIBRANCY AND
NATIONAL SECURITY
The U.S. maintains a technological advantage and government interest
U.S. government efforts primarily revolve around establishing National Institute of Standards and Technology industry
standards in addition to various agency investments around defense and national security. More broadly, the private sector
has multiple startups and leading established vendors vying to create de facto standard commercial quantum systems. TheNational Quantum Initiative Advisory Committee, which consists of 22 experts, will meet semiannually to review theprogram’s impact and progress in facilitating U.S. leadership in quantum technology. Several pieces of proposed legislation(notably H.R. 4521) are aimed at vetting the export of niche intellectual property to other nations, particularly China, andseemed designed to protect the nascent quantum ecosystem.
Europe invests independently and collectively through the European Union
France, Germany, the U.K. and the Netherlands are listed in the top 10 nations investing in quantum. England has invested
the most, in the $1.3 billion range, while the Netherlands announced a 10-year investment commitment to QuTech, aquantum technology institute developing building blocks for scalable quantum computing. The EU takes an industry
champion approach, backing startups such as IQM, whose 5 qubit superconducting machine lags offerings from nonEuropean firms such as IBM. The concept of industry champions has held currency in the EU for decades, with very mixed
results in past applications.
China’s efforts dwarf those of in region competitors, Japan and South Korea
China is the APAC nation receiving the most attention for its quantum investments coupled with speculation about thenational security implications of those investments to the rest of world. Japan has invested $270 million over a 10-year
period and is taking a leadership position in the development of quantum information science career tracks. South Korea
has stated it will invest $40 million over the next five years to develop core quantum technologies for the purpose ofestablishing an in-country research ecosystem.

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