Blue Chip Issue 96

BLUECHIPINVESTMENT |

BLUECHIPINVESTMENT | TechnologyA quantum computer, showing wiring made from copperand gold, operating in a highly controlled environment.So, how long before we see quantum computing in everydayuse? Most experts agree we are at least 10 to 15 years awayfrom having stable, fault-tolerant quantum computers that canoutperform classical ones on a wide range of practical tasks.In the meantime, we’ll likely see hybrid models where classicaland quantum systems work together, with quantum computershandling specific types of problems. [3]Early adopters can experiment with quantum processors viathe cloud – an emerging area known as Quantum-as-a-Service(QaaS) through providers such as Amazon. This is making earlyexperimentation accessible to a broader range of industries.Many companies are adopting a cautious approach. Quantumcomputing is expensive, and its commercial applications remainunproven. For now, it’s a high-risk, long-term bet – and thatdoesn’t always sit well with shareholders or CFOs. However,governments and tech giants are pouring billions into research,indicating strong long-term belief in its transformative power. Itcould be the next frontier for the global trade war and quest fortechnological dominance.Positioning for the quantum opportunityQuantum computing may sound like science fiction, but it israpidly becoming science fact. Although the technology is stilldeveloping, its potential to transform industries is enormous.The “a-ha!” moment is yet to come but bear in mind that AI in itscurrent form has been with us for 15 years already, and OpenAI(ChatGPT’s founder) was launched in 2015. It takes time for thestep change to happen.This is all well and fine, but how do we access this opportunityas investors? In short, it’s tough – there are very few individualcompanies dedicated solely to this field. Quantum computingis a global race led by US tech giants, deep-tech startups andgovernment-funded research across China and Europe. IBM,Google and Microsoft are current frontrunners in long-termhardware and software development, while startups like IonQ andRigetti are pushing nearer-term commercial deployments. We aremore likely to be capturing the opportunity for now within theselarger companies, as well as the services that can be deployed,such as Amazon’s web services.As the technology matures, it’s important to be positionedacross the full spectrum of investment opportunities to capturewhat could become a significant growth cycle, impacting not onlythe companies driving innovation, but the whole supply chain, thedownstream beneficiaries and ultimately, the consumer.We capture this by holding a combination of funds poised toaccess this opportunity:• Index funds. A “catch-all” covering the whole market. You willgain exposure, by default. This helps when it is not obvious whothe winners will be. Take NVIDIA as an example, now a clearleader in AI infrastructure, but far from an obvious pick just afew years ago. Of course, even NVIDIA could one day bedisrupted by new technologies like quantum computing – whoknows, it might even end up as a value stock.• Small cap growth funds. These funds are specifically lookingat emerging technologies and the nascent startups drivingthe innovation.• Large cap growth funds. These companies are using substantialprofit margins to invest into the next growth wave and can doso via their enormous financial resources and talent pool.Quantum computing could be the next wave which drivesinnovation and growth across the markets and allows newtechnologies like AI to reach their exponential growth potential.Imagine running AI on a ZX Spectrum and then ask yourself whatbreakthroughs we’ll be discussing 10 years from now. Withouta massive leap in computing power, that progress simply wouldn’tbe possible.[1] A transistor is like a small switch, and the more switches the faster thecomputer.[2] For those interested in the underlying science, topics such as“superposition” and “entanglement” offer valuable insights.[3] Altcoinbuzz.ioPeter Foster,Chief InvestmentOfficer, Fundhouse32 www.bluechipdigital.co.za

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