Google's Willow chip rally related quantum computing stocks. Is it justified?

Reminder: For all the basic concepts about quantum computing, please refer to my previous post, which will not be repeated in this post: “Quantum computing current progress and related stocks“

Google unveils chip Willow

Recap

On December 9, 2024, Google unveiled what it called an “incredible” quantum computing chip. The chip, called “Willow,” can handle complex calculations in just five minutes that would take “ten times as long” for the world’s most powerful supercomputers, the tech giant said in a study published in the journal Nature. 25″ years to complete.

Any breakthrough?

Most impressively, according to Google’s latest announcement, Willow is the first quantum system that has been able to reduce error rates while increasing the number of qubits.

The problem that has plagued all attempts to build practical quantum computers so far is that the quantum bits on which they are based are difficult to control. They can maintain their quantum state for only a fraction of a second, and the more qubits added to a system, the greater the chance of errors.

However, Google says it has found ways to reduce errors as it adds more qubits to the system. According to Google, Willow is the first system to achieve this.

Hartmut Neven, founder of Google Quantum AI, wrote in an online post: “Generally, the more quantum bits you use, the more errors you will make and the system will become conventional.”

Google says Willow can “exponentially” reduce errors as the number of quantum bits increases, which “addresses a key challenge in quantum error correction that has been pursued in the field for nearly 30 years.”

The Willow chip has 105 qubits, giving it best-in-class performance in quantum error correction and random circuit sampling (RCS).

Winfried Hensinger, professor of quantum technology at the University of Sussex, said Google’s Willow chip represents “a new milestone in how quantum computers can handle errors that occur during operation.” Their technique becomes more efficient at reducing errors, using more of the extra quantum bits to correct those errors. This is a very important milestone for quantum computing.”

Unlike Google’s previous claim that its quantum computer Sycamore achieved “quantum supremacy”, Google did not claim that Willow achieved “quantum supremacy”, but instead emphasized its achievements in “surpassing classical computing.”

Engineers expressed reservations

Alphabet engineers did not mention a specific target date for when quantum computers could be used for “useful” tasks, but they hinted that it would be less than 10 years.

“The Willow chip cannot crack modern cryptography,” Charina Chou, chief operating officer of Google Quantum AI, told The Verge.

Although Google claims that Willow can complete the “random circuit sampling” (RCS) benchmark in less than 5 minutes, the same calculation would take the world’s fastest Frontier supercomputer 10,000,000,000,000,000,000,000,000 years to solve. But Google stressed that Willow does not belong to CRQC.

“It is estimated that it will take us at least 10 years to crack RSA encryption, and we will need about 4 million physical qubits to do it,” Charina Chou also said.

In 2019, Google publicly unveiled its previous generation quantum computer Sycamore and advertised that it completed a calculation in just 200 seconds, which theoretically would have taken the world’s fastest supercomputer at the time 10,000 years to complete.

In the RCS benchmark test, the Willow chip completed a standard calculation in less than 5 minutes, which would take more than 10^25 years for the fastest current supercomputer – not only far longer than the universe, but also longer than the universe. Age is also far beyond our understanding of traditional computing capabilities.

Alphabet spun off quantum computing

Sandbox Introduction

Alphabet’s quantum computing business was spun off into SandboxAQ on March 22, 2022. Alphabet has remained mum about The Sandbox, the division founded in 2016 by Jack Hidary.

Business

The Sandbox is currently developing enterprise software that uses, at least in part, quantum technology. The company is headquartered in Palo Alto, California, and has 55 employees.

Fund Raising

and raised $500 million in early 2023. In December 2024, more than $300 million in new funding was raised.

Notable Investors

The company has already secured some high-profile investors and clients, including former Google CEO Eric Schmidt, Breyer Capital, and TIME, owned by Salesforce CEO Marc Benioff. Ventures and T. Rowe Price. Among them, Schmidt will take over as chairman of the board of directors.

Customers

Sandbox’s clients include SoftBank Mobile, Vodafone and Mount Sinai Health System in New York.

Market reaction

Why is it so popular?

Google is one of many companies preparing to use post-quantum cryptography (PQC) to defend against password cracking since Edward Snowden revealed that the NSA and other agencies were quietly funding research on quantum computers that can crack passwords. one.

Google CEO Sundar Pichai said on the X platform: “We believe that Willow is an important step in our efforts to build a practical quantum computer, which has practical applications in areas such as drug development, fusion energy, and battery design.” Computers will be able to process vastly larger amounts of data, leading to potential breakthroughs in fields such as medicine, science, and finance.

Related stocks

After the news of Google’s public release of Willow came out, Google’s stock price rose by 0.46% the next day. Quantum computing stocks in the U.S. stock market were mixed, with Rigetti Computing (U.S. stock code: RGTI) rising 2%, IonQ (U.S. stock code: IONQ) falling 10%, and D-Wave Quantum (U.S. stock code: QBTS) falling 8%.

For related stocks, please refer to the detailed list in my other article on quantum computing: “Quantum computing current progress and related stocks“

The arguments for and against

The Optimist’s View

Eric Jackson, founder and president of EMJ Capital, is one of the optimists. He believes that Google’s new quantum computing chip, Willow, has the potential to become a more powerful money-maker than Nvidia and Bitcoin.

He highlighted two stocks he likes in the quantum space: Rigetti and D-Wave. Both names have witnessed massive gains, surging an estimated 300% in the last month.

He claimed that they are all working to make chips as good as or better than Google, and that more investment is pouring into the field, so investors should pay attention to these companies. Jackson highlighted a small company called BTQ that does what he considers “post-quantum Crowdstrike” work, whose job is to protect all of those crypto wallets and their sensitive data.

Rigetti develops multi-chip quantum processors for scalable quantum computing systems; D-Wave is a quantum computing company dedicated to developing and delivering quantum computing systems, software and services; BTQ was founded by a group of post-quantum cryptographers dedicated to To address the security threats posed by large-scale general-purpose quantum computers.

Wall Street is questioning

Wall Street is not optimistic about the views of the above optimists. The mainstream analysts on Wall Street are unanimously conservative and do not believe that the foreseeable future will bring substantial benefits to the business market or investors.

Despite skepticism on Wall Street, quantum technology will continue to advance, and optimists believe the market is waking up to the huge potential of quantum computing. But just like the rise of artificial intelligence, it will take time to prove itself. Those who believe in optimistic early investments in quantum technology may be able to benefit from the huge bull market in the future.

Conclusion

Just hype

Google itself has repeatedly stressed that the Willow chip cannot meet most people’s high expectations for quantum computing. Although the Willow chip has demonstrated amazing computing power in theory, Google itself admits that “there is still more work to be done to realize the transformation of these capabilities into practical applications.”

As I wrote in “Why are superconductors important? current progress and related companies“The so-called surge in superconductor-related stocks caused by South Korea’s superconductor breakthrough mentioned in the post is all groundless hype and not worth paying attention to. You don’t have to have any doubts. There are countless cases in the history of the stock market. Within a quarter, these related stocks that have risen for no reason will fall back to their starting points.

Still in the laboratory stage

Quantum computing and city-temperature superconductors are indeed progressing thanks to the efforts of scientists around the world, and some progress is reported every once in a while, but they are still very far from practical application, and everything is just artificial hype.

Nuclear fusion is closer to commercialization

In comparison, the nuclear fusion technology mentioned in “The current progress of nuclear fusion, and relevant companies” is much closer to real commercial operation and practical application than quantum computing and city-temperature superconductors, and is more real.

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