Every few months, a headline announces that quantum computing has reached a new milestone. A larger qubit count, a lower error rate, a new partnership between a tech giant and an enterprise customer. The coverage generates excitement, investment committees take notice, and a fresh wave of capital flows into quantum-adjacent ventures.
Most of that capital will be poorly deployed. Not because quantum computing lacks potential — the physics is real, and the eventual applications are transformative — but because the gap between laboratory capability and commercial viability remains wider than the marketing materials suggest.
I write this as someone who invests in frontier technology through NexaTech Ventures. We have looked at dozens of quantum computing pitches. We have backed none. Here is why, and what would need to change.
The Honest State of Quantum Hardware in 2026
Let me be direct about where we actually are. The most advanced quantum processors available today operate with qubit counts in the low thousands — IBM’s latest roadmap targets over four thousand qubits by 2026, Google has demonstrated quantum error correction milestones, and several European and Chinese programmes are pursuing alternative architectures including photonic and topological qubits.
None of these systems can yet solve commercially relevant problems more efficiently than classical supercomputers for the vast majority of business use cases. The reason is error rates. Current quantum systems experience decoherence and gate errors at rates that require extensive error correction overhead, which consumes most of the available qubits. A system with a thousand physical qubits may yield fewer than ten logical qubits after error correction — nowhere near enough for the complex optimisation or simulation problems that represent quantum computing’s commercial promise.
This does not mean quantum computing is a dead end. It means the timeline to commercial relevance is longer than many investors and vendors are publicly acknowledging.
Where the Real Near-Term Value Exists
If the hardware is not ready for general commercial deployment, where should business leaders and investors be looking? Three areas stand out.
First, quantum-inspired algorithms running on classical hardware. Several companies have developed optimisation algorithms inspired by quantum computing principles — quantum annealing simulations, variational methods — that run on standard processors and deliver genuine improvements in logistics, scheduling, and portfolio optimisation. These are not quantum computing, strictly speaking, but they borrow from quantum theory and deliver measurable business value today. As an investor, I find this segment far more interesting than pure quantum hardware plays.
Second, quantum-safe cryptography. The advent of fault-tolerant quantum computers — whenever it arrives — will render current encryption standards obsolete. The migration to post-quantum cryptographic standards is a genuine, urgent commercial need. NIST published its first post-quantum cryptography standards in 2024, and enterprises are beginning the multi-year process of migrating their cryptographic infrastructure. The companies providing the tooling, consulting, and implementation services for this migration have a real market today, not a speculative future one.
Third, quantum sensing. This is the quietest and potentially most commercially mature branch of quantum technology. Quantum sensors — devices that exploit quantum properties to achieve measurement precision beyond classical limits — are already being deployed in oil and gas exploration, medical imaging, and navigation systems. The applications are niche but high-value, and the technology readiness level is significantly ahead of quantum computing.
The Investment Traps to Avoid
The quantum computing investment landscape is littered with traps for the unwary. The most common is confusing hardware progress with commercial readiness. A company that announces a new qubit milestone has achieved a physics result, not a business one. The question that matters for investors is not how many qubits a system has, but how many error-corrected logical qubits it can sustain, and what commercially relevant computation those logical qubits enable.
The second trap is the “quantum advantage” claim. Several companies have claimed quantum advantage — demonstrating a computation on a quantum system that a classical computer cannot perform in reasonable time. In most cases, these demonstrations involve artificial problems specifically constructed to favour quantum systems, with no direct commercial application. A genuine quantum advantage on a commercially relevant problem has not yet been demonstrated in a peer-reviewed setting.
The third trap is investing in application-layer quantum software when the hardware to run it does not yet exist. Several startups are building quantum algorithms for drug discovery, materials science, and financial modelling. The algorithms are mathematically elegant. The hardware to execute them at meaningful scale does not exist and may not exist for five to ten years. Investing in these companies requires either a very long time horizon or a credible belief that classical simulations of quantum algorithms can bridge the gap.
What Would Change My Mind
I am not a quantum sceptic. I am a quantum realist. At NexaTech Ventures, we would invest in quantum computing companies under specific conditions: a demonstrated, reproducible quantum advantage on a problem with clear commercial value; a hardware roadmap with credible error correction milestones; or a hybrid classical-quantum approach that delivers measurable business value today while building toward a quantum-native future.
Until those conditions are met more broadly, the smart money in quantum is in the enabling technologies — post-quantum cryptography, quantum-inspired classical algorithms, and quantum sensing — rather than in the quantum computers themselves.
The revolution is coming. It is just not as close as the press releases suggest.
Scott Dylan is the Founder of NexaTech Ventures. He writes on technology investment, AI, and frontier technology.
(Disclaimer: Scott Dylan is not a shareholder of Nexatech Ventures)
