The computing revolution investors cannot ignore
Quantum computing is moving from theory to real-world investment. Professor David Reilly says it could reshape finance, security and global technology infrastructure.
3 min
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.”
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The recent budget has forced a reckoning for property investors.
Negative gearing now restricted to new residential builds, the CGT discount gone and on paper, the numbers look different.
And many investors are responding by pivoting toward yield, prioritising cash flow over capital growth in a way that property strategists say misses the point entirely.
“The debate has shifted to yield versus growth as if they are opposing forces,” says Abdullah Nouh, founder of Melbourne-based buyers’ agency Mecca Property Group. “But that framing is itself the mistake.”
Nouh, who works with high-net-worth families and investors on long-term acquisition strategy, argues that capital growth remains the primary driver of genuine wealth creation and that the post-budget environment has made quality assets more important, not less.
The numbers make his case plainly. An additional $500 per week in rental income is welcome. A prestige asset appreciating by $1 million over a market cycle is transformative.
These are not equivalent outcomes, and portfolios built around yield at the expense of location and land value tend to generate income while wealth stands largely still.
The more nuanced shift Nouh is seeing among sophisticated investors is a move toward assets where both outcomes can be engineered simultaneously – established homes on substantial land in quality locations, where the existing dwelling can be repositioned, rental returns improved, and the underlying land value compounds independent of what sits on it.
For investors with existing equity, commercial property is also entering the conversation in a more serious way.
Prestige industrial assets, medical centres and long-leased essential retail offer income profiles that residential property in most capital city markets cannot currently match: longer lease terms, tenants covering outgoings, and greater predictability than the residential tenancy cycle.
“The investors who build lasting wealth are rarely the ones who chased yield or growth exclusively,” says Nouh.
“They are the ones who built a strategy they could sustain – one that generated enough income to hold quality assets through multiple cycles while those assets compounded in value.”
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