Art Market Appears on Strong, if Cautious, Footing After London Sales

Major auctions in London this week are proving the art market is in solid health at the start of 2023, yet high interest rates and inflation in addition to the war in Ukraine continue to keep enthusiasm in check.

Overall, more than 90% of the lots were sold at combined evening sales of modern, contemporary, and ultra-contemporary work at Christie’s and Sotheby’s, while Phillips evening sale was 100% sold. Those are unquestionably good results.

But there are signs throughout the market that consignors and collectors are holding back a bit, says Drew Watson, head of art services at Bank of America Private Bank.

“The sales were fairly solid, but there was kind of a lack of major headliners,” Watson says. “We’re seeing some increased conservatism among the collector base. There’s more of an emphasis on people looking at established categories like modern masters, blue-chip post-war, [and] Surrealism.”

A dedicated evening sale at Christie’s focused on Surrealism did well, for instance, realizing nearly £39 million (nearly US$47 million) with 30 of 32 lots sold. Sotheby’s will hold a dedicated Surrealist sale on March 15 in Paris.

But works by young contemporary, often female, artists continued to attract interest all week. At Phillips, “it was the cutting-edge woman artists who stole the show this evening,” Olivia Thornton, head of 20th-century and contemporary art, Europe, said at a news conference following an evening sale on Thursday.

Most notable among these artists at Phillips was Caroline Walker, whose large-scale work Threshold, painted in 2014, generated consistent back-and-forth volleying for more than 11 minutes. It eventually sold to a bidder in the sale room for a hammer price of £730,000, £927,100 with fees—a record for the artist.

Other records were achieved by Sarah Ball, whose Elliot, sold for £120,600, with fees, above an £80,000 high estimate, and by Angela Heisch, whose Egg White Blue sold for £76,200, above a £30,000 high estimate.

The results followed strong bidding for female artists at Christie’s earlier in the week, which included the previously minted record for Walker of £693,000 for The Puppeteer. Cristina Banban’s La Fatiga Que Me das (You Exhaust me) also achieved a record, selling for £163,800, above a high estimate of £70,000, and Michaela Yearwood-Dan’s Love me nots achieved £730,800, far above a £60,000 high estimate.

But also at Phillips, a dynamic canvas by Gerhard Richter offered by French collector Marcel Brient for between £10 million and £15 million, was withdrawn at the last minute. Although the work “generated interest from collectors,” it was not at a level that met Brient’s expectations, and so he “was not prepared to let it go,” Cheyenne Westphal, Phillips chairman, said at a press briefing after the sale.

The absence of the Richter resulted in a dramatically different overall auction total of £20.3 million for Phillips. The revised estimate for the 23 remaining works was between £15.8 million and £22.2 million.

Another work offered by Brient, an untitled late work by Willem de Kooning from 1984, sold for a hammer price of £5 million, £6 million with fees, below the presale low estimate of £7 million.

While the froth may be out of the market at the moment, there is some cautious optimism of the future, with a handful of single-owner collections anticipated for May. Already announced at Sotheby’s is a group of works to be offered by Jan Shrem and Maria Manetti Shrem of San Francisco, including a major work by Pablo Piccaso, in addition to the Erving and Joyce Wolf Family Collection of decorative and fine arts. Christie’s, meanwhile, will be selling 16 modern and post-war paintings from the collection of S.I. Newhouse that could realise more than US$144 million.

“We’re only going to see more as we get closer to those sales,” Watson says. It’s a sign, he adds, of “cautious optimism for the higher end of the market in New York.”

Buyers, however, remain more conservative, as was evident with some of the major works offered this week, such as Lucian Freud’s portrait, Ib Reading, 1997, which sold for £17 million, within expectations, at Sotheby’s. They are willing to buy, but at the right price.

“Buyers are pretty savvy, especially at the high end, and will kind of expect a bit of a discount” considering current macroeconomic and geopolitical conditions, Watson says. As a result, auction houses will need to be disciplined in how they price works. “It’s not really a market where you want to push estimates,” he says.

One notable shift this week was renewed active bidding from buyers in Asia, Watson says.

At Christie’s, a bidding war between collectors in Japan and Singapore for a painting by Shara Hughes, Rough Terrain, ended in the hands of the collector from Singapore who placed a bid of £500,000, well above the £300,000 high estimate. Overall, 13% of bidders were from Asia during Christie’s evening sale of 20th- and 21st-century art and a separate sale of Surrealist works.

Sotheby’s, meanwhile, credited “deep bidding” from Asia for driving results at its evening sales, with several of these collectors noted as the “underbidder.” Over half the lots in Sotheby’s The Now sale of ultra-contemporary works received bids from Asia, while Asian buyers secured Barbara Kruger’s Untitled (Out of your mind… In your face), 1989, which realised £889,000, above a high estimate, and Andy Warhol’s portrait of Debbie Harry, which realized £6.9 million, also above a high estimate, after spirited bidding in both instances.

An Asian buyer also bought Richter’s Abstraktes Bild, 1986, at Sotheby’s, in another active bidding round. The final price, with fees, was £24.2 million.

At Phillips, the last two lots attracted several online bids from China, although the paintings—Ball’s Elliot, and Danica Lundy’s Bonefire—went to a collector bidding via a specialist on the phone and to a Canadian online bidder, respectively.

Whether the results in London portend the future for the art market this year remains to be seen. It may be best at this point to consider a post-sale press conference comment from Phillips CEO Stephen Brooks, who said, “It’s difficult to draw conclusions from one week of sales.”

For decades, the world’s computing power has quietly expanded at an astonishing pace.

From the first transistor developed at Bell Labs in 1947 to modern processors containing billions and even trillions of transistors, each generation of technology has been faster, smaller and more powerful than the last.

But according to quantum physicist and technology entrepreneur David Reilly, that era of effortless progress is beginning to slow.

Reilly, CEO of Sydney-based Emergence Quantum and Professor of Physics at the University of Sydney, says the computing infrastructure underpinning modern economies is approaching fundamental physical limits.

And that could have enormous implications for finance, artificial intelligence and global investment.

Speaking at an industry event organised by Kanebridge International, Reilly said many critical parts of modern society depend on computing and the infrastructure used to process information.

The slowdown behind the tech boom

For years, the technology industry relied on a steady improvement known as Moore’s Law, where the number of transistors on a chip doubled roughly every two years.

More transistors meant more computing power, allowing faster software, smarter devices and ever-larger data systems.

Today, however, those gains are slowing.

“It feels to me very innate that I’m going to just find that next year there’s going to be another breakthrough,” Reilly said.

“But if you look at the data…there’s a slowing down, a roll off in performance that started some 10, 20 years ago.”

Rather than making chips dramatically faster, manufacturers are now largely increasing computing capacity by packing more transistors onto each processor.

The approach works, but it comes with growing complexity, higher costs and increasing energy demands.

The brute-force race for AI

That challenge is already visible in the massive data centres being built to support artificial intelligence.

In the race to dominate AI, companies are constructing vast computing facilities that consume huge amounts of electricity and water. Reilly described this expansion as a “brute force” approach driven by the global competition to develop advanced AI systems.

Yet the demand for computing power continues to accelerate.

Artificial intelligence, advanced robotics, healthcare research, pharmaceuticals and cybersecurity all require far more processing capacity than today’s systems can easily deliver.

The question now facing the technology sector is whether traditional computing can keep up.

Enter quantum computing

That is where quantum computing enters the conversation.

Unlike conventional computers, which process information using binary switches that represent ones and zeros, quantum computers exploit the unusual behaviour of particles at the atomic scale.

Reilly describes them as a fundamentally different type of machine.

“So a quantum computer is a wave computer,” he said.

Instead of processing information through simple on-off switches, quantum systems can use wave-like properties of particles to process many possible outcomes simultaneously.

Those waves can interact in complex ways, reinforcing correct solutions while cancelling out incorrect ones. In theory, this allows quantum systems to tackle certain types of problems dramatically faster than classical computers.

What it could mean for finance

The concept may sound abstract, but its potential applications are significant.

Quantum computers are expected to transform areas such as materials science, chemical modelling and pharmaceutical development.

They could also help solve complex optimisation problems in logistics, finance and risk management.

For financial institutions in particular, the technology could offer new tools for detecting fraud, analysing market behaviour and optimising portfolios.

But the shift will not happen overnight.

“One message to take away is that quantum is not going to suddenly solve all of your problems,” Reilly said.

Instead, he said quantum systems will likely complement existing computing technologies as part of a broader and more diverse computing ecosystem.

Why data centres may soon “go cold”

One key change already emerging is how computing systems are physically designed.

Many next-generation technologies, including quantum processors, operate far more efficiently at extremely low temperatures. As a result, future data centres may rely heavily on cryogenic cooling systems to manage heat and energy consumption.

Reilly believes that the shift will gradually reshape the computing industry.

“Over the next five years, you’re going to see data centres go cold,” he said.

“And as that happens, they almost drag with them new compute paradigms.”

Emergence Quantum, the company he co-founded, is focused on developing technologies to support that transition, including cryogenic electronics and integrated hardware platforms designed for quantum computing and energy-efficient systems.

A new technological era

For investors and businesses, the technology remains in its early stages. But the scale of global interest is growing rapidly.

Governments, research institutions and technology companies are investing heavily in quantum research, betting it could become a foundational technology for the next generation of computing.

For Reilly, the moment feels similar to earlier technological turning points.

In the 19th century, new discoveries in thermodynamics helped drive the development of steam engines and the Industrial Revolution. In the 20th century, advances in electromagnetism led to radio, television and eventually the internet.

Quantum physics, he suggests, could represent the next chapter in that story.

“Today we have, as a society, in our hands new physics that we’re just beginning to figure out what to do with,” Reilly said.

“But I think it’s an exciting time to be alive and watch what happens over the coming decades.”