The next big tail wing in commercial real estate

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Just as artificial intelligence has transformed the data center sector into gold mines, quantum computing is already growing into its own real estate revolution.

Quantum Computing uses quantum mechanics to solve problems beyond the capabilities of the most powerful classic computers. Until now, these supercomputers were mostly living in academic or government facilities due to limited practical applications. That’s also why investment in Quantum is about 10 years behind AI.

However, quantum computing suddenly moved forward rapidly and became commercially viable. As a result, you now need your own real estate. A new report from JLL says the significant real estate impact is “on the horizon.”

“We are committed to providing a wide range of services,” said Andrew Batson, head of data center research at JLL.

“We see private sector play really marrying the point at which the commercialization of the product takes place,” he said.

Analysts say that could only be five years away.

Last year, Quantum Companies generated revenues of less than $750 million, with a startup focused on quantum technology raising about $2 billion in funding, according to a JLL report citing a survey by McKinsey and Pitchbook. The report says rapid progress has been made over the past year suggests that Quantum Computing will see $2 billion in investment by 2030 and will generate $100 billion in revenue by 2035.

According to the JLL report, “a potential ‘quantum advantage breakthrough’ around 2030 could lead to a $500 billion investment, similar to the impact of ChatGPT on AI funds.”

Companies like Microsoft, IBM, Google and Amazon All investments and breakthroughs in quantum computing.

“The next big accelerator in the cloud will be quantum, and we are excited about our progress,” said Satya Nadella, Microsoft CEO last month.

That real application is just beginning to be understood.

“Think about pharma, agriculture, and materials science across all types of manufacturing. Plus, financial services. When you think about encryption, it’s both the big opportunity and the threat Quantum presents,” Batson said.

It makes sense that most quantum computing currently living in academic or governmental institutions will concentrate most of the new developments to commercially house it in those areas.

According to experts at JLL, fledgling industries need access to academics, infrastructure, an educated workforce, government support, private investment and public-private advocacy.

Today’s top 20 global quantum markets are formed near national research centres and universities. In the US, Chicago is included. Boston; New Haven, Connecticut. Colorado, Maryland and parts of Southern California.

Psiquantum in Silicon Valley chose the Chicago Steel Factory complex to open a facility funded primarily by the state of Illinois. Developed by the associated Midwest, Illinois Quantum and Microelectronics Parks are set to cover 128 acres, or approximately 5.6 million square feet.

Batson called Chicago the child of a private property development poster on quantum computing, but he noted that overall private development still accounts for less than 20% of the market in the country.

For now, at least, quantum computing cannot live in traditional data centers that house AI and the cloud. This is because the physical shape is different from that of a quantum computer rack. Quantum computers also require electromagnetic shielding to prevent what is called “noise.” In this case, it refers to external external obstacles such as electricity, magnetism, vibration, or sound.

“The main question I get from clients is whether existing data centers will be removed. And the answer to that is that Quantum computing will be granted to existing data center infrastructure that exists,” Batson said. “An existing redevelopment? Is it brand new? That’s all of the above.”

According to the JLL report, quantum real estate really has two potential trajectories. You can either stay focused on today’s existing hubs or move to the data center. The former argument is that it is a very specialized technology, so there are very few places to support it on a large scale.

Meanwhile, data centers can provide the cloud infrastructure needed for future quantum computing. Integrating quantum and AI can both be more efficient.

“This is a period of oversight of education and technology development,” Batson said. “We’re just waiting to see where it is, what it is, how it will happen.”