Clifford Chance

Quantum is in some respects like other emerging technologies over the past few years, such as AI and blockchain. Much of it is already here but by another name, and truly disruptive use cases may be few. But there remain important reasons to pay attention to this esoteric union of computing and physics. We explore key considerations from a legal and commercial perspective.

If you've been following popular commentary, you might have a mental picture of baby quantum computers being incubated in hidden laboratories, their silicon grey matter exponentially multiplying over time. One dark night in the not-too-distant future, their intelligence will shoot past that of the primitive, classical computers we use today. Come morning, all encryption will have been broken, and banks, corporates, and countries worldwide will have lost control of all their information.

Like "Y2K" before it, this picture of "Q-Day" as an inevitability that will turn the world on its head is a compelling one. But quantum technology, in this sense, exists more in theory than in practice, at least for now. In time, quantum computing will become better and cheaper, and quantum computers will prove themselves better suited to certain tasks than their classical peers. While they will open new doors, it remains to be seen quite which doors those will be.

What is quantum computing?

The advent of silicon-based computing was revolutionary because it drastically accelerated the process of problem-solving. That problem-solving ability is powered by arrays of transistors performing mathematical operations, necessarily founded on a binary number system (i.e. zeroes and ones). In contrast, quantum chips harness properties that allow particles to exist in numerous states at once and to interact with the states of other particles.

What does this mean for problem-solving? Classical computing is like having a single universe in which to solve a problem. To optimise a process in a single universe requires that you try each variation of that process through sequential trials and observe the results. This takes time, and sometimes too much time to warrant the effort. Quantum computing, on the other hand, is like having access to many parallel universes. You can run a trial once while in fact running numerous trials simultaneously – you'll be able to observe which universes yield the optimal outcomes.

So, quantum computers could be enormously useful for a class of problems known as optimisation problems. Which compounds are best at targeting a particular protein or enzyme? Which combination of assets yields the highest return with the lowest volatility? Which route should a delivery driver take through a city to maximise successful deliveries and minimise carbon emissions? What is the ideal positioning for batteries or transformers on an energy grid? There are countless potentially high-value use cases for quantum brainpower.

The future is…now?

Quantum technology, in a broad sense, is here today and its applications are not all that glamorous.

Motion detectors, for example, exploit the photoelectric effect, a quantum phenomenon by which electrons are emitted from a material when it is exposed to light of a certain frequency. Semiconductors also rely on quantum-mechanical principles in their design and use.

Some existing telecommunications infrastructure harnesses quantum properties to protect data by allowing particles, usually photons, to take on a state of 'superposition' (for our purposes, a mathematical invisibility cloak), meaning that they that cannot be intelligibly observed by a bad actor. At least in theory, by storing and transmitting decryption keys as (unintelligible) quantum bits (or "qubits") rather than traditional bits, communications are protected from eavesdroppers.

The promise of quantum as a powerful force to be harnessed stems, however, from the possibilities of quantum computing, in particular the use of quantum states to try many different solutions to a problem at once. Google has used a quantum computer to solve in 200 seconds a problem that reportedly would have taken a classical supercomputer 10,000 years to solve. However, the problem in question had no real resemblance to the kinds of problems that are currently seen as worth solving.

Not every problem has a quantum solution

Some of the discourse surrounding quantum today is reminiscent of that surrounding blockchain. In the years following the emergence of the Bitcoin protocol, many punters predicted that it would fundamentally reset the way we understand the storage and exchange of value. Our own primary research into how the financial services industry is progressing with distributed ledger initiatives suggests a different reality. Blockchain has proven useful in a narrow field of applications where it delivers advantages over existing technologies, but has not had a large-scale disruptive impact. Quantum, as applied to general computing, is still in the preliminary stages of development. It lacks the scalability and error-correction capabilities needed for developers to validate in practice those use cases that appear most promising in theory.

New technologies with old legal problems

New quantum technologies will give rise to legal issues similar to other emerging technologies:

• Data privacy and cybersecurity: We can be confident that quantum computers will one day be able to decrypt the vast majority of data that are encrypted using current encryption techniques. Personal data and confidential information could be exposed. Cryptographers are working on new protocols with quantum computing in mind, which will hopefully see the emergence of so-called "quantum-proof" techniques, sometimes referred to as "post-quantum" cryptography. Many of the existing data protection regimes around the world require organisations to take account of the state of the art in adopting measures to protect personal data and, likewise, cybersecurity obligations evolve as the threat landscape changes over time. Organisations should take care to keep their information security controls up to date – which is the right approach whether quantum is in the picture or not.
• Intellectual property: With big money at stake and technology that is especially difficult for non-technical experts to conceptualise, we anticipate that there will be a drawn-out period of IP disputes and norm-setting as to which companies enjoy the commercial benefits of investments in quantum technology. Numerous patents for quantum technology have already been filed, but it remains to be seen how patents and copyright might apply to protect each layer of the nascent quantum technology stack. There is also the possibility that quantum algorithms will turn out themselves to be very good inventors, lowering the cost of innovation. This would also lower the value of intellectual property rights and put more of the focus on the execution or implementation of novel ideas.
• Ethics, particularly when quantum powers AI: Building AI systems using quantum hardware has the potential to significantly expand the power of those systems as against the AI we use today. With significant advancements in computing power come greater risks to individuals and a heavier burden of responsibility to mitigate ethical challenges, including bias/discrimination, accountability/governance, transparency and explainability. This risk is especially pronounced in regulated industries such as medical technology and financial markets, where supercharged AI could overwhelm existing protections. Organisations adopting AI tooling need to be thinking about these issues in any case.
• Competition: Access to compute has an anti-competitive effect. As we've seen previously, with the mainstream adoption of personal computers, web browsers, search engines, smartphones and, likely soon, powerful large-language models, quantum resources may one day become a baseline requirement to play in a variety of markets, raising barriers to entry with potentially harmful effects for competition and the interests of consumers. Fortunately, the essential elements of competition and antitrust regulation already in place today stand ready to protect against this.
• Trade, sanctions and merger control: As with any dual-use technology, governments must take care to ensure that sophisticated quantum technology does not find its way into the wrong hands. Given the technology could be weaponised to undermine a country's national security and economic interests, we are already seeing legislative safeguards put in place. In March, the UK Government updated its export control regime through changes to The Export Control (Amendment) Regulations 2024, adding new controls on semiconductor technology and quantum technology. France, Spain and the Netherlands have also imposed restrictions in recent months. Corporate acquisitions of quantum capability will increasingly be subject to national security approval.
• Liability: As new technology is adopted, courts and legislatures take time to establish which players should be responsible for which sources of liability. This is usually driven by the technology itself and how each player in the supply chain works together as a matter of adopted practice (e.g. chip manufacturers, parts manufacturers, cloud service providers, implementation specialists, etc). Quantum will be no different. It will take time for norms to establish, and commercial contracts will need to be drafted to clearly allocate risk and reward between each participant.

Now what?

Given the strategic importance of quantum technology to the UK's future, it is helpful to see the UK Government's commitment of £2.5 billion to the development of quantum technologies in the UK over the coming decade. Public spending should provide a boost to private-sector investment, too. We expect that legal and regulatory developments will reflect the national security risks and geopolitical significance of this technology.

The years to come will test the ability of the UK technology community to work together and across the public-private divide to identify the most promising applications and the most significant risk areas. As tech lawyers, we look forward to working with our clients, tech industry associations and government agencies in pursuit of a quantum sector that is innovative, resilient and sustainable.

This article was first published by TechUk as part of their Unleashing Innovation campaign week