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Forecast for quantum computing downgraded.

IDC downgrading quantum forecast saying AI offers better near-term value

International Data Corporation, IDC, is downgrading its forecast for quantum computing “considerably” saying it will continue to experience slower growth until there is a major quantum hardware development. Other technologies, such as generative AI, are expected to offer greater near-term value for end users, IDC says. Worldwide quantum computing market will be $ 7.6 billion by 2027, down $ 1 billion from its previous forecast.

The forecast also refers to “an array of macroeconomic factors such as higher interest and inflation rates and the prospect of an economic recession”..

“Customer spend for quantum computing has been negatively impacted by several factors including slower than expected advances in quantum hardware development which have delayed potential return on investment.”

“There has been much hype around quantum computing and when quantum computing will be able to deliver a quantum advantage, for which use cases, and when,” says Heather West, research manager at IDC. 

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“Today’s quantum computing systems may only be suitable for small-scale experimentation, but advances continue to be made like a drumbeat over time. Organizations should not be deterred from investing in quantum initiatives now to be quantum ready in the future.”

IDC’ s second forecast for the worldwide quantum computing market, projects customer spend for quantum computing to grow from $1.1 billion in 2022 to $7.6 billion in 2027. This represents a five-year compound annual growth rate (CAGR) of 48.1%. The forecast includes base quantum computing as a service as well as enabling and adjacent quantum computing as a service.

“The new forecast is considerably lower than IDC’s previous quantum computing forecast, which was published in 2021.” 

IDC expects the quantum computing market will continue to experience slower growth until a major quantum hardware development that leads to a quantum advantage is announced. 

“Until then, most of the growth will be driven by maturation in quantum computing as a service infrastructure and platforms and the growth of performance intensive computing workloads suitable for quantum technology.”

IDC expects investments in the quantum computing market will grow at a CAGR of 11.5% over the 2023-2027 forecast period, reaching nearly $16.4 billion by the end of 2027. 

“The billions of dollars being allocated to the research and development of quantum computing have led to recent advancements in quantum computing hardware and software, as well as new error mitigation and suppression techniques. These advancements fuel speculation that achieving a near-term quantum advantage may be possible using today’s noisy intermediate-scale quantum (NISQ) systems, the forecast says. 

“Over the long term, these investments are expected to result in the delivery of large-scale quantum systems capable of solving some of the most complex problems that challenge today’s scientists and engineers, causing a surge in customer spend towards the end of the forecast period.”

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