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Generative AI hype dampens VC funding for quantum computing
Private funding for quantum computing technology dropped sharply in recent months, as the venture capital market shifted its focus to the wildfire growth of generative AI, according to the latest State of Quantum report issued by The Quantum Insider.
In the report – whose publication was backed by two VC firms and a quantum computing company, IQM – the authors describe a roughly 50% decrease (to about $1.25 billion) in VC funding for quantum technology in 2023 when compared to its historic peaks in 2021 and 2022.
Most quantum computing systems these days, according to IDC research manager Heather West, are suitable only for experimentation and proof-of-concept, not live problem-solving. However, some technology is slowly leaking through to the operational side, most notably D-Wave’s quantum annealer device, which is used by large enterprises and some government agencies to solve complex optimization problems.
“It’s not at the exponential speed-up that eventually we would like to see, but it’s an accelerator that’s performing at a significantly faster pace than what we would see from a classical compute standard,” West said.
Nevertheless, generative AI is seen much more enterprise-ready than quantum.
“The portfolios are shifting more toward generative AI in the near-term, but [there are still] long-term strategic bets around quantum,” said Gartner Research vice president and analyst Chirag Dekate. “Generative AI can actually deliver near-term results.”