When you hear about quantum computing and where investments are being made, Canada isn’t usually the first country that comes to mind.
That’s about to change.
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Why quantum computing?
Quantum computing is a computing method that uses quantum bits (known as qubits) to process information. Traditional computing models use a binary 1 or 0 to store data.
Quantum adds a third state to the mix, known as superposition. This means that each qubit can be a 0, 1, or both at the same time. This dramatically increases processing power and opens up endless possibilities for new applications.
Companies pursuing quantum computing are approaching it from different angles. Some are focusing on hardware, others on the software that sits on top of the hardware. Finally, others are focused on hyperscaling. Hyperscalers are large-scale cloud providers housing the massive data centres needed to support quantum workloads.
Who are the players in the Canadian quantum computing field?
The Canadian government recently announced that it’s investing heavily in developing a quantum computing ecosystem, determined to make it a national priority.
As part of that strategy, Ottawa has committed hundreds of millions over the next several years to move Canadian firms from prototyping to full-scale industrial-scale quantum computing systems.
One major initiative, known as the Canadian Quantum Champions Program (CQCP) earmarked up to $92 million in the federal budget towards its first phase. The goal is to build systems that can tackle real-world workloads in multiple areas such as materials modelling, secure communications, defence, and energy.
Four companies were selected to be part of the CQCP, with each eligible to receive approximately $23 million dollars. Those players are Waterloo-based Anyon Systems, Sherbrooke-based Nord Quantique, Vancouver-based Photonic, and Toronto-based Xanadu Quantum.
The longer-term goal for Ottawa isn’t just to fund R&D, but to anchor these innovative high-text firms and their workers to Canada. This also reinforces technological sovereignty and control from outside forces, such as the United States and Europe where competition is intensifying.
Where can you invest in quantum computing?
The four Canadian quantum companies listed above aren’t listed on the market, at least yet. As of the time of writing, Xanadu is the only one of the four pursuing a path to be publicly traded.
Xanadu is expected to hit both the TSX and NASDAQ, becoming the first publicly traded pure-play quantum computing company.
Until that happens, investors can look to several large U.S. companies that are already deeply invested in quantum computing.
First up is Alphabet (NASDAQ: GOOGL). Alphabet is a global leader in the field of quantum computing and fits squarely into the hyperscaler category. Its quantum initiatives complement the company’s rapidly expanding AI platform.
Next, we have IBM (NYSE: IBM). IBM operates one of the largest fleets of cloud-accessible quantum processes and continues to invest heavily in the field. This makes “Big Blue” a hardware cornerstone for any quantum-focused portfolio.
Finally, we have Microsoft (NASDAQ: MSFT). Microsoft is concentrating on the software and cloud layers of quantum computing, connecting multiple hardware back-ends as an orchestrator through its Azure Quantum platform.
Quantum computing and your portfolio
Quantum computing is in an early, experimental phase. Significant investments are being made in data centres, and hardware and software development, while business models continue to evolve.
For investors, this means that diversification remains essential. The three U.S.-based companies noted above are already market leaders in their respective domains.
If anything, the quantum investments being made are more evolutionary extensions of those core businesses.
This makes them stellar options to consider in any well-diversified portfolio.
