Quantum’s Threat is a Big Opportunity

One day very soon, you’ll wake up to headlines that change everything about digital security.

A quantum computer will have broken a widely used encryption standard in minutes.

When this ‘Quantum Breakthrough Moment’ happens, every digital system on the planet suddenly becomes vulnerable.

While many have been looking elsewhere, the quantum sector has exploded with activity.

One I particularly like, SEALSQ [NASDAQ:LAES] has surged over 115% just this past month.

But this is just the beginning.

That ‘quantum moment’ is starting to feel a lot closer…

Why the Threat is Already Here

Here’s the thing about quantum threats: you don’t need to wait for quantum computers to arrive before the damage begins.

Foreign governments and hackers are copying encrypted data today, storing it away, and waiting.

The strategy is called ‘harvest now, decrypt later.’

They know they can’t open the encrypted files today.

They’re storing it until quantum computers become powerful enough to crack it open like a digital safe.

This means that companies and governments need to start preparing by immediately changing their security to new standards that can withstand quantum computing.

And time is running out…

Quantum Computing Pushes Forward

Every advancement in quantum computing makes the security problem more urgent.

As quantum computers get more powerful, the ‘Quantum Breakthrough Moment’ gets closer.

Companies and governments are slowly waking up to the fact that they need quantum-safe security immediately.

Big institutions, foreign governments, and major tech companies are piling in.

Banking giants like HSBC completed their first quantum-powered bond trade. Asset manager Vanguard ran portfolio optimization using quantum computing.

Pharma giant Novo Nordisk announced it was investing €188 million into a dedicated quantum venture fund.

While most companies are not yet focused on quantum security, it’s very likely that in the coming months they’ll begin to look into this more closely.

The ‘harvest now, decrypt later’ strategy means that companies can’t wait for the crisis to hit before protecting themselves.

If we think about the scale of the threat, then the market for quantum-safe security is enormous.

Every connected device on the planet will eventually need protection against quantum threats.

That includes every smartphone, every computer, every server, etc.

The U.S. government alone has allocated US$7.1 billion to upgrade federal systems, but this represents just a fraction of the global opportunity.

From that perspective, we’re still in the early stages of the quantum computing industry’s development.

As quantum computing progresses and achieves scientific breakthroughs, the urgency surrounding quantum safety will intensify.

We’re already seeing this trend play out and expect it will gain momentum in the coming months.

Investors properly positioned with the right investments could continue riding this wave as demand for quantum security explodes and touches every electronic device on earth.

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Note from Charlie

Here at Fat Tail, we try to find you ideas that are out on the edge of the financial world.

In the US, they’re seeing big potential in quantum. While in Australia we’re seeing it in nimble disruptors equipped with the latest AI.

Be sure to keep an eye out next week for my colleague Lachlann Tierney’s latest report on a complete ASX unknown.

He thinks this stealth small cap it has the potential to become the next Afterpay lurking on the ASX.

With AI in the hands of smaller, more agile companies the potential for disruption is greater than it’s been for years.

Keep an ear to the ground.