C-suites want concrete quantum use-cases, not hype

Organizations are reluctant to invest in quantum computing due to an apparent lack of clear cut use-cases, according to new research.

Analysis from QuEra Computing suggests that the market is shifting from “hype-driven investment” to a “proof-driven discipline”, with organizations now demanding clear evidence of value before committing to investment.

This market shift is showcased by current spending habits, the study noted. While nearly half (44%) of enterprises expect quantum budgets to increase in the year ahead, a larger number (46%) expect them to remain flat.

Elsewhere, 10% also anticipate budget decreases as hype falters.

"Buyers want proof, not glossy brochures," said Yuval Boger, chief commercial officer at QuEra Computing.

"Organizations are moving from early experimentation to disciplined investment decisions, where budgets are scrutinized, use cases must be justified, and procurement plays a central role."

A quantum "reality check"

A contributing factor to the budget tightening lies in optimism among leadership figures, the study noted, pointing to a growing divide between executives and technical staff.

Senior decision-makers, for example, are far less optimistic about the near-term prospects of quantum computing and are instead adopting a more cautious, cost-conscious approach.

QuEra described this trend as a “C-suite reality check” and noted that “enthusiasm alone is no longer sufficient to unlock funding”.

Simply put, businesses need to have a clear understanding of the potential value of quantum computing, as well as a clearer route to ROI.

The current state of affairs in quantum bears similarities to that in the generative AI market over the last three years, with C-suite leaders growing increasingly concerned about returns on investment.

"With nearly 100 quantum companies competing today, executives are asking two questions before they commit," Boger commented.

"Who has the funding to be here for the long haul, and who has clear scientific proof that their approach works and a credible path to larger machines that deliver real enterprise value?"

Quantum FOMO isn’t enough to convince execs

According to QuEra, earlier investment cycles in quantum were largely driven by a “fear of missing out”, with many organizations getting caught up in the hype cycle.

This trend has dissipated over the last year, however. Just 9% of respondents cited successful pilot results as their primary driver of increased spending in this domain.

Indeed, the main drivers of investment now vary wildly, the study noted. Early-stage organizations still cite competitive pressure and FOMO as leading motivators.

Their more advanced counterparts, meanwhile, typically point to the “classical wall” - the point where conventional computing cannot handle certain workloads - as a leading driver of investment.

Public sector investment also plays a key role in decision-making when it comes to quantum computing, according to QuEra.

Government-related investment schemes were cited as a key driver of budget increases by 28% of respondents, more than any other factor, the company noted.

"Quantum computing is still pre-commercial, and public funding is underwriting the risk that private capital is not yet willing to take on alone,” the company said.

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