Sushil Kuner
Principal Associate
UK Financial Services Regulation
Head of UK FinTech
Article
10
The rise of quantum computing (QC) is a topic fundamental to all businesses globally. Whether or not quantum computers will appear in offices any time soon, cloud technology and some other central processing hubs are already using QC to speed up their processing. The opportunities and risks, however, are important to understand.
The technological step that separates classical computers from quantum computers is the difference in the apparatus that processes information. The key to traditional computers is the array of microscopic conductors known as 'bits'.
Every bit can either be recorded as a '1' if it has current running through it or '0' if it does not, allowing each bit to have two potential states. Qubits, which are found in quantum computers, harness the fundamental discovery of quantum physics (that subatomic particles can exist in multiple states simultaneously) to have vast numbers of potential.
To put into context the difference in processing power that qubits allow for, 500 qubits have the same power as 2500 conventional computer bits.[1] It's clear to see how QC allows for far more complex algorithms to be run and for these programs to process at significantly faster speeds.
QC has undoubtedly come a long way in its relatively short lifespan since Paul Bienhoff described a theoretical quantum computer in 1982.[2] The Canadian company D-Wave was the first to take QC into the commercial realm, selling a 182-qubit machine for around $10 million in 2011, and IBM made QC available over the cloud in 2016.[3] However, a number of challenges remain.
It remains very difficult to make viable and error-free qubits. Creating the perfect conditions for quantum states to maintain their superpositions takes significant energy and remains expensive and experimental. Also, there are not currently enough quantum-trained engineers to keep up with any projected commercial demand for QC, nor is there enough quantum-centred software to make use of the power if QC were to become more widespread.
McKinsey estimated that, while some 5000 quantum computers may be operational by 2030, the hardware and software necessary for these computers to really upgrade computing speeds for the masses will be at least five years behind.[4]
Who are the market players leading the development of QC and innovation? Technology firms such as IBM, Google, Microsoft, and Amazon are advancing research and providing cloud-based QC services. Financial institutions, such as JPMorgan Chase and Goldman Sachs, are exploring the potential and benefits of QC finance.
Industrial applications are being pursued by companies such as Honeywell and Boeing, while startups such as Rigetti and IonQ are dynamically exploring quantum technology. Academic institutions like MIT, Cambridge, and Berkeley are also contributing foundational research pertaining to the technology, while government initiatives such as NASA, the UK’s National Quantum Programme, and the EU’s Quantum Flagship are all funding large-scale projects, shaping the landscape of quantum and its future.
Quantum technology is transforming the landscape of the biopharmaceutical industry by leveraging quantum algorithms to aid in drug discovery. These technologies allow for more accurate modelling of biomolecular interactions, leading to faster and more precise predictions of how drugs will behave in the human body.
This quantum advancement accelerates pharmaceutical research and development. Additionally, quantum-driven molecular modelling enables for simulations of chemical structures and reactions which improve the efficiency of product development. Companies being first to the race at pioneering in this field may secure patents, giving them a strategic advantage in pharmaceuticals, scientific research, and energy applications.
The advent of QC gives rise to a suite of legal issues and risks for businesses, including but not limited to safety, contractual, tort, regulatory and more. We consider below examples of three key areas in which QC poses legal risks.
QC presents a fundamental threat to existing encryption methods (which serve to protect sensitive information, posing significant risks to laws and regulations prescribing data protection standards. Breaches will likely result in liabilities, penalties and reputational damage.
The prospect of 'harvest now, decrypt later' espionage, where encrypted data is reaped today and cracked by quantum technologies in future once feasible, presents additional legal challenges.
Find out more about QC and data protection.
Whether you are developing or deploying quantum technologies in your business, our full-service team has the experience and expertise to provide you with holistic and specialist advice on the implications of quantum on your business, the key legal risks associated, and appropriate mitigation measures to consider.
Unsure of who to reach out to for support? Get in touch with our specialists Sushil Kuner (Financial Services Regulatory), Alex Brodie (Intellectual Property), Samuel Beighton (Competition, Trade and FDI), Loretta Pugh (Data Protection and Cyber Security) Kieran Laird (Regulatory), Matt Harris (Data Protection, Cyber Security and Resilience) or Sean Adams (Dispute Resolution) who are on hand to advise and support you.
Thank you to our sector trainees who helped draft this article, Sebastian Moncrieffe, Arianna Lorentzos and Joel Butcher.
Footnotes
[1] What is a qubit?
[2] A brief history of quantum computing
[3] The history of quantum computing you need to know [2024]
[4] A game plan for quantum computing
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