Giant Wall Street investment bank Goldman Sachs (NYSE:GS) has revealed that it’s made a major quantum computing breakthrough. Goldman said that it’s working on computer algorithms that may be used on hardware that could be available within the next 5 years.
Goldman Sachs has reportedly been working closely with Silicon Valley firm QC Ware for several years. Both organizations have been exploring the use of quantum computing algorithms in finance applications. They’ve also looked into how the technology will be able to outperform traditional binary computers for financial software.
Researchers at Goldman and QC Ware have been studying how quantum computers can be tapped for the Monte Carlo algorithm – which is used to determine or assess risk and also to simulate market prices for various financial instruments.
By using traditional hardware devices, the complex (or computationally-intensive) calculations required for Monte Carlo are carried out about once overnight. This basically means that in volatile capital markets, traders or investors have no choice but to use outdated results.
Computer science researchers have been aware, for a long time now, that quantum computing algorithms will be able to significantly outperform Monte Carlo simulations. In fact, these faster computers could deliver a 1000x boost in performance when compared to the traditional methods used today. However, this will need error-corrected quantum hardware that may not be available for another 20 years.
But the Goldman Sachs and QC Ware team are claiming that they’ve actually reached a major step that might see the simulations performed on “near-term” quantum computing hardware. These devices might be available as early as 5 years from now. In order to make this a reality, the research teams acknowledged that they’d have to give up some of the speed (from 1000x to around 100x) in order to generate “shallow” or lightweight Monte Carlo algorithms.
William Zeng, head, Head of Quantum Research at Goldman Sachs, noted that quantum computing might have a considerable impact on financial services, and their recent collaboration with QC Ware “brings that future closer.”