Why We Should Worry about Y2Q

Amidst all the ChatGPT3 news, a paper published last month by Chinese scientists went largely unnoticed. Though disputed, the authors claim to have developed an algorithm that uses existing quantum computers to break RSA algorithms, the standard encryption used by everyone from social media sites to government agencies.

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Over 75% of China’s quantum computing patents focus on quantum cryptography. While US organizations filed twice as many quantum patents as their Chinese counterparts, China’s top-down strategy prioritizing quantum cryptography has yielded a global IP leadership position.

Not only has China filed more patents, but the quality of their IP is comparable to US quantum cryptographic IP (Chinese IP quantum computing writ large is over 15% weaker than US IP).

Why it Matters: By piggy-backing off of innovations made by Western organizations in general quantum computing, Chinese researchers have been able make impressive advances in cryptography without the enormous time and infrastructure investments required to develop entirely new quantum computers.

Yes, but: This is not to say the Chinese Government is not interested in commercializing their own quantum computers. In fact, the share of Chinese patent filings related to general quantum computing has nearly doubled since 2020.

Startups Prepare For “Post-Quantum” Cryptography

Regardless of its veracity, the recent Chinese publication discussing quantum-based RSA decryption underscores the importance of developing quantum-resilient security.

A number of startups have emerged to tackle various elements of this challenge:

• Entropy: Developing random numbers is critical to unbreakable quantum keys
• Management Tools: Software, SDKs, and algorithms to manage quantum cryptography systems
• Quantum Key Distribution: Sharing keys across devices requires new network infrastructure

However, Most quantum experts believe that “Y2Q”, the date when existing quantum computing infrastructure can break RSA encryption, is at least 10 years away.

Still, many of those same experts believe we will need at least that much time to transition to a fully quantum resilient security posture.

Speaking of Security Posture…

US defense contractors and government labs account for 5% of quantum cryptography IP generation. While the US lags Chinese State Institutions by nearly 50% in terms of patents filed, new investment by Los Alamos National Lab, Oak Ridge National Lab, and Boeing is bringing the US closer to parity.

• National Labs: Los Alamos National Lab and Oak Ridge National Lab are both investing heavily in quantum key distribution, including continuous secret sharing and space-based based systems
• Defense Primes: Boeing has been a clear leader, standing up a distinct organization (Disruptive Computing and Networks (DC&N)) to focus on quantum cryptography
• FFRDCs: Federally-Funded R&D Centers such as MITRE and Aerospace Corporation, plus Qinetiq and Peraton (not technically FFRDCs) have focused on risk frameworks and standards
• Commercial Technology Companies: Although IBM, Microsoft, and Intel have accelerated their investments in quantum cryptography, their portfolios remain significantly smaller than in other advanced computing fields.

Quantum Cryptography IP Commercialization Opportunities

We triaged thousands of quantum computing patents to highlight four portfolios of available IP from leading US Research Institutions with unique implications for Quantum Cryptography. Click on an opportunities to see more detail on our IP Marketplace.

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