GENERAL BACKGROUND

Quantum Computing (“QC”) aims to harness subatomic particles to perform calculations that are far beyond the reach of the fastest known classical computer today, thereby giving birth to a new breed of computers called quantum computers.1 QC simulates laws of quantum physics to go beyond simply cramming more processor on a chip to increase processing power.

QC has the potential to transform the world as we know it through its applications in both civilian and defence areas. All major developed and developing economies as well as many private sector players are actively investing in developing this new technology and building use-cases to stay ahead of competitors and not left behind in the global race.

POTENTIAL APPLICATIONS OF QC

The mainstream deployment of QC is expected to be one of the major technology disruptions. The primary benefit of QC is in the areas of complex problems that classical computers cannot quickly solve. Therefore, the areas that will see initial applications of QC are expected to be artificial intelligence (“AI”), biology, chemistry, finance, healthcare and materials science.2 However, it is crucial to note that that challenges to gain QC advantage are no longer subject matters of scientific discovery and theory but are matters of engineering.3

In the short term, QC has the potential to confer significant benefits by way of quantum simulation, quantum optimization and cybersecurity. The pharmaceutical industry is looking at quantum simulation to develop new drugs and substances by examining the exact structure of a molecule to determine its properties and to understand their interactions with other molecules. Since the interaction of atoms within a molecule is itself a quantum system, QC may be able to model even the most complex molecules in our bodies. Development in this direction will promote faster development and deployment of new drugs and other products, and has the potential to discover new cures.4

Quantum optimization would significantly benefit any business seeking to optimize its conventional business functions using superior computing tools compared to classical computers. An illustration would be the collaboration between JP Morgan Chase, IBM and others that are already using QC in areas like developing trading strategies, portfolio optimization, asset pricing and risk analysis.5

QC also poses a serious threat to the cybersecurity systems relied on by virtually every company. Most of today’s online-account passwords and secure transactions and communications are protected through encryption algorithms and QC can be a threat to any encryption system based on classical computing. Therefore, a new wave of QC-based encryption methods will be required and are now being developed.6

QUANTUM COMPUTING: INDIAN SCENARIO

In India, currently, there are no specific laws or regulations related to QC. However, the Ministry of Electronics and Information Technology (“MEITY”) is responsible for “policy matters relating to information technology; Electronics; and Internet (all matters other than licensing of Internet Service Provider)” and “administration of the Information Technology Act, 2000.7

The Department of Science and Technology (“DST”) under MEITY, Indian Institute of Science (“IISc”), Tata Institute of Fundamental Research (“TIFR”) and Indian Institute of Science, Education and Research (“IISER”) are currently engaged in QC research.8

In 2018, a QC research programme received a sum of USD 27.9 million over a period of five years, as part of the National Mission on Interdisciplinary Cyber-Physical Systems. During January 2019 in the first meeting of QuEST programme (Quantum Information Science and Technology), a road-map that would help in laying the groundwork for building QC capacity. Further, a sum of INR 80 crore in a span of three years will be invested to facilitate research in the QC field.9 After three years, the Indian Space Research Organisation (“ISRO”), Defence Research and Development Organisation (“DRDO”), and Department of Atomic Energy “(DAE) are expected to jointly pool in a sum of INR 300 crores to push QuEST towards ensure that India's QC programme matches international standards.10

This year in February, while delivering the union budget, the National Mission on Quantum Technologies & Applications (“NM-QTA”) was announced which is to be implemented by the DST with an outlay of approx. USD 1.1 billion. Implementation of NM-QTA would help develop quantum computers, secured communications through fibre and free space, quantum encryption and crypt-analysis, along with other associated technologies. It will also prepare the next generation of skilled manpower, boost international research collaboration and give a boost to the Make in India and Start-up India initiatives.11

Indian private companies and start-ups in the QC space, like Automatski, BosonQ, Entanglement Partners, QpiAI, Qulabs.AI, QuNu Labs are either affiliated with one of the government universities like IITs, IISc, etc. or other government departments like DST, DRDO, etc.12 Even in the investment space, Sequoia India has invested in numerous foreign companies engaged in QC.13

MAJOR PLAYERS

All major technology incumbents are deeply invested in QC related activities, with software development being the driving force in the industry. The major players in the QC market internationally are Google in partnership with John Martinis’ research group and NASA, Microsoft, IBM, Intel in collaboration with QuTech Delft, Amazon, Microsoft14, along with Hewlett Packard Enterprise, Alibaba Group along with Chinese Academy of Sciences, Baidu, Hitachi, Toshiba, Nokia Bell Labs, Lockheed Martin, Raytheon, Airbus, Amgen and Biogen.15 Many start-ups are front-runners in the development of QC capabilities, companies like D-Wave from Canada, Rigetti of USA, Silicon Quantum Computing of Australia and Cambridge Quantum Computing in UK are leading examples.16

LEGAL AND REGULATORY ISSUES AND CHALLENGES ARISING FROM QUANTUM COMPUTING

Cybersecurity

With the development commercial QC resulting in the exponential growth in the computing power, the risk of hacking becomes more prominent. The more our mission-critical systems in commercial and government sectors become dependent on QC, the more it is critical for us to ensure that appropriate measures are put in place to secure these QC systems from cyber hacking. Both commercial enterprises and the government will need to implement and adopt security protocols and data procurement policies broadly in compliance with the standards and security measures that would be enumerated in the Personal Data Protection Bill (“PDP Bill”) which is currently under consideration by the Indian Parliament.

Another concern that would arise from a cybersecurity perspective is the impact of QC on encryption standards. It is expected that a sophisticated quantum computer will be capable of cracking existing encryption standards in incredibly short time which could have huge implications for current conventional forms of encryption.

The PDP Bill which is currently being debated and finalized in the Indian Parliament requires controllers and processors of personal data to maintain appropriate security measures to protect that data from unauthorized access. The adequacy of these standards is broadly determined in accordance with the current technology that is available. Companies would have to be mindful of this as encryption standards which are currently adequate and legally prescribed may be outdated with the growth of QC.

Privacy

There are wider privacy concerns which arise from the development of quantum technologies. Quantum computers are expected to be much more capable than conventional computers of analyzing and processing larger volumes of data. From a privacy law perspective, this is likely to lead to more personal data being processed and in more sophisticated ways. This will lead to more challenges for existing privacy legislations to specifically identify if such collection and processing of data is occurring in accordance with applicable law.

Artificial Intelligence

If the development and growth of QC enables quantum computers to use Artificial Intelligence (“AI”) to make decisions, who will be responsible for any harm or damage caused by such decisions? In order to impute liability, legal personhood is key. No law currently in force in India recognizes AI to be a legal person. The general rule thus far has been that since AI cannot qualify as natural or legal persons, they cannot be held liable in their own capacity.

E-Contracts

The adoption and use of cloud computing services has seen a significant change to contracting practices with growth of Software-As-A-Service (SaaS), Platform-As-A-Service (PaaS) and Infrastructure-As-A-Service (IaaS) arrangements. This is likely to continue with the growth of QC. Hence, it becomes critical to understand the key issues / concerns for quantum powered technologies from a contractual perspective.

Key areas where existing contractual arrangements would need to be amended are:

  • Remoteness and Quantum of Damages: As the computational outcomes / output of QC technologies are still unclear at present, a key contractual question that remains to be addressed is how a contracting party would be able to understand or foresee the types / extent of losses or damages which might be suffered in a contract relating to a QC technology. This would impact key contractual clauses such as the indemnities and liability of parties under the contract. This would need to be addressed on a case-to-case basis by the parties.

  • Determining Industry-Standard Service Levels: As the major benefit of quantum computers is their superior performance, another key issue to determine contractually would be determining adequate service levels or performance standards to determine if the services being provided are adequate. This would again need to be addressed on a case-to-case basis by the parties.

CONCLUSION

It has become imperative for governments and industries to be prepared for the developments related to QC technologies. They need to secure communications and financial transactions, while fostering this revolutionary technology to remain competitive, drive societal progress, generate employment and sustain economic growth. Supplemented with pioneering research, skilled workforce and reliable funding support, QC can enable humanity to develop a cluster of innovative applications across different sectors and industries worldwide.


1 Andris Ambainis, “What can we do with a quantum computer?”, Institute for Advanced Study, 2014, www.ias.edu/ideas/2014/ambainis-quantum-computing (last visited on November 2, 2020)

2 https://www.ibm.com/thought-leadership/institute-business-value/report/quantumstrategy (last visited on November 2, 2020)

3 Ibid

4 https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/a-game-plan-for-quantum-computing# (last visited on November 2, 2020)

5 https://www-03.ibm.com/press/us/en/pressrelease/53483.wss (last visited on November 2, 2020)

6 Ibid

7 Government of India (Allocation of Business) Rules, 1961

8 https://bank.sbi/documents/2182813/4777159/Quantum+Computing+in+Banking_Indian.pdf (last visited on November 2, 2020)

9 https://www.livemint.com/technology/tech-news/why-india-is-falling-behind-in-the-y2q-race-11579018170008.html (last visited on November 2, 2020)

10 https://bank.sbi/documents/2182813/4777159/Quantum+Computing+in+Banking_Indian.pdf (last visited on November 2, 2020)

11 https://dst.gov.in/budget-2020-announces-rs-8000-cr-national-mission-quantum-technologies-applications (last visited on November 2, 2020)

12 https://quantumcomputingreport.com/privatestartup (last visited on November 2, 2020)

13 https://www.vccircle.com/sequoia-india-leads-seed-funding-round-in-quantum-computing-startup-horizon/ (last visited on November 2, 2020)

14 https://www.pwc.fr/fr/assets/files/pdf/2019/11/en-france-pwc-point-of-view-quantum-computing-2019.pdf (last visited on November 2, 2020)

15 https://www.insead.edu/sites/default/files/assets/dept/centres/gpei/docs/insead-student-quantum-computing-investment-analysis-apr-2018.pdf (last visited on November 2, 2020)

16 https://www.pwc.fr/fr/assets/files/pdf/2019/11/en-france-pwc-point-of-view-quantum-computing-2019.pdf (last visited on November 2, 2020)

 

 


Nishith Desai Associates 2013. All rights reserved.