Asset owners were slow to the AI revolution, not because they lacked interest or intelligence, but because they initially asked the wrong questions. The debate inside most asset owners was about adoption: whether to trust algorithmic signals, how to explain black-box decisions to boards, and whether AI systems threatened or reinforced the primacy of human judgment. Those were legitimate concerns. They were also, in retrospect, a distraction from the more important question: what AI risks and opportunities required action now and which could wait.
Quantum computing is arriving in the same way. And asset owners are about to make the same mistake.
To be clear, quantum computing is not another iteration of AI. It is a fundamentally different kind of computing that uses the rules of quantum physics to process information. Where classical computers, including those used for AI, process information as bits, each fixed as either a 0 or a 1, quantum computers use qubits, which can exist as both 0s and 1s simultaneously, a property called superposition.
In simple terms, this means quantum computers can examine many possible answers at the same time, rather than serially. This allows them to tackle certain problems that would take conventional computers too much time to be practical. Quantum computing is not a replacement for classical computing or AI; it is a complement, with the most promising near-term applications emerging from hybrid systems that combine the strengths of all three.
It is also important to note that today’s quantum computers are error-prone, operate with a limited number of qubits, and remain largely confined to experimental and nascent commercial applications. They can demonstrate an advantage over classical machines on a narrow set of problems but are not yet reliable or scalable enough for general‑purpose use.
Experts disagree on the timeline for fault-tolerant, investment-grade quantum computing, with estimates ranging from as early as 2029 to a decade or more away. What is not in dispute is that the pace of progress has consistently surprised even its most cautious observers.
The Wrong Debate
The institutional conversation about quantum computing, if it exists at all, tends to go wrong in one of two predictable ways.
The first is uncritical enthusiasm: quantum computing will revolutionize portfolio optimization, factor modeling, and derivative pricing. The second is allocators dismissing it outright: fault-tolerant quantum computing is at least a decade away, the technology is unproven, its application to investing is unknown, and there are more pressing priorities.
Both responses treat quantum computing as a single thing requiring a single decision. That’s wrong.
Quantum computing presents asset owners with two distinct challenges that operate on entirely different time horizons and demand different institutional responses. Conflating them produces paralysis. Separating them produces a framework worth acting on. The near-term challenge is cryptographic exposure — and I would argue this is not speculative.
Quantum computing could eventually weaken the public-key cryptography that protects portfolio systems, custody records, trading and settlement instructions, and authenticated communications, such as confirmations. This won’t immediately disrupt the market, but what researchers are concerned about is what they call “harvest now, decrypt later” schemes that could threaten sensitive data — and have a long shelf life.
The Bank for International Settlements reports that "Though QCs [quantum computers] do not yet exist, there is an urgent need to deploy quantum-resistant algorithms, specifically for highly sensitive data.” Why? As the BIS points out, this risk is present-tense, not future-tense. Bad actors may already be harvesting encrypted financial data today with the intention of decrypting it once quantum computers can do so. Until quantum-resistant encryption is fully deployed, sensitive data remains exposed, which is precisely why pre-emptive action is urgent rather than optional.
The National Institute of Standards and Technology (NIST) finalized its first post-quantum cryptographic standards in 2024, which outline encryption tools designed to withstand these attacks. NIST, which wants system administrators to move to the new standards as soon as possible, argues that they protect electronic information, including confidential email messages and online transactions that “propel the modern economy.”
What most asset owners lack is any awareness that this exposure is real, that it is a current condition rather than a distant risk, and that custodians and technology vendors are at varying stages of readiness.
This is a governance gap that doesn’t require quantum expertise to close. It requires the same diligence that competent trustees do for any operational risk. They ask, ‘What is our exposure?’ ‘Who owns the mitigation?’ and ‘What is the timeline?’
Any asset owner that has not asked its custodian bank, prime broker, administrators, cloud providers, and core technology vendors where they stand on post-quantum cryptography migration is behind. Not speculatively behind, but behind today.
The clock is already running on the medium-term challenge — competitive displacement.
JPMorgan, BlackRock, Goldman Sachs, and Vanguard are not waiting for fault-tolerant quantum systems to arrive. They are already building quantum research partnerships, developing talent pipelines, establishing vendor relationships, and cultivating organizational fluency.
While the technology may be a decade away from investment-grade reliability, the institutional readiness gap is opening today.
A striking example is HSBC’s collaboration with a team from IBM to create what they describe as “the world’s first-known empirical evidence of the potential value of current quantum computers for solving real-world problems in algorithmic bond trading.” The demonstration delivered “up to a 34 percent improvement in predicting how likely a trade would be filled at a quoted price, compared to common classical techniques used in the industry.” According to Philip Intallura, HSBC group head of Quantum Technologies, “we now have a tangible example of how today’s quantum computers could solve a real-world business problem at scale and offer a competitive edge, which will only continue to grow as quantum computers advance.”
Asset owners have seen this dynamic before. When systematic and quantitative strategies matured in the 2000s and 2010s, the managers who had spent years building infrastructure such as data pipelines, research capacity, and risk architecture captured the early alpha.
Asset owners who had not asked the right questions of their managers during that build-out period discovered the misalignment only after they saw performance decline.
The managers investing in being ready now will have durable structural advantages when quantum-enabled optimization, simulation, and pricing capabilities mature. The alpha, when it arrives, will flow to them first. Asset owners, not surprisingly, will incur the consequences.
That doesn’t mean asset owners should "build a quantum computing team." Very few have the scale or the mandate for that. The solution is narrower and more achievable: begin asking managers what they are doing and why. Existing due diligence frameworks do not include quantum readiness as a category. They should.
Some asset owners already have more quantum intelligence at their disposal than they realize.
QED-C estimates that private venture capital investment in quantum reached $4.9 billion in 2025 — an increase of more than 190 percent over 2024. That means many asset owners have de facto exposure to quantum, whether they know it or not, through VC allocations to quantum hardware, quantum-safe cybersecurity, and quantum software firms. These VC managers have, by necessity, developed sophisticated views on the technology landscape, the competitive dynamics between hardware approaches, and the realistic timelines for commercial viability. They have reviewed the pitch decks, conducted technical due diligence, and formed judgments on which bets are credible.
Asset owners should be mining that knowledge systematically. A conversation with their venture managers about their quantum-related holdings is not a technology seminar; allocators should see it as a portfolio review with an educational kicker. It costs nothing beyond the attention of an investment staff member who is already in regular contact with those managers. And it produces exactly the kind of grounded, practical intelligence that boards need to ask better questions
Asset owners effectively have three choices.
One approach is to ignore quantum computing, treat it as a technology issue for asset managers and vendors, and revisit it only once it becomes unavoidable, a stance many asset owners hold today that echoes the late-2010s view of AI, with costs that are now evident.
The second is to assess the near-term cryptographic exposure and begin integrating quantum readiness into manager due diligence, without committing to significant organizational changes. This is achievable for almost any asset owner, regardless of size or sophistication. It requires proactive governance, not technical expertise.
The third is to prepare for quantum’s eventual arrival and begin building the institutional knowledge of quantum's aspirational capabilities through active engagement with asset managers, service providers, and academics.
The second option, I believe, is the right choice for most asset owners; the third is for those with the intellectual curiosity and resources to go deeper. The wrong choice — the one that carries real fiduciary risk — is the first.
What Boards Should Be Asking
Trustees do not need to understand quantum mechanics, but they do need to know that their organizations face two distinct quantum-related risks that operate on different time horizons and that neither is being systematically addressed.
Three questions are worth putting on the board agenda:
First, where do our custodians, technology vendors, and key counterparties stand on post-quantum cryptography migration, and what is our exposure if they are slow?
Second, have we asked how our external managers are thinking about these capabilities?
Third, do we have a process for distinguishing between quantum risks that require action now and quantum opportunities that can be monitored rather than pursued?
This evaluation requires the same good governance that has always been required, which is a willingness to ask uncomfortable questions before the answer becomes obvious.
Asset owners who waited on AI are now scrambling to catch up — hiring, reorganizing, revising investment policies, explaining to boards why the organization is behind. Some of that scrambling is productive. All of it is expensive and avoidable. Asset owners who engage now — before the technology forces the issue — will be better positioned to defend against these cyber threats and capture the investment opportunities.
(For those interested in learning more about quantum computing and investing, I would recommend Dr. Oswaldo Zapata’s recently published text, "A Portrait of Quantum Technologies in Finance (2026),” especially the chapter by Carlos Arcila Barrera, “Quantum Computing in Asset Management,” Dr. Elisabetta Basilico and Dr. Daniel Volz’s, “Quantum Computing 101: Understanding the Next Computing Revolution,” and the CFA's recently published “Quantum Computing vs. AI: Real-World Applications.”)
Angelo Calvello, PhD is the founder of C/79 Consulting LLC and writes extensively on the impact of AI on institutional investing. All views expressed herein are solely those of the author and not those of any entity with which the author is affiliated.
