D-Wave Quantum Inc. said Wednesday that it had not only achieved "quantum supremacy," but had done so using a practical problem, marking an industry first.

D-Wave is set to report fourth-quarter financial results on March 13. Shares were up 7% on Wednesday while peers IONQ Inc. rose 4%.

The quantum-computing company said its Advantage2 system solved a problem in 20 minutes that would take one of the world's most powerful supercomputers well more than 1 million years to complete. A peer-reviewed paper was published in the scientific journal Science to illustrate the findings.

Quantum supremacy, or quantum advantage, describes the process by which a quantum computer performs a task no classical machine ever could. The term was coined by theoretical physicist John Preskill in 2011, and scientists have strived to accomplish it for nearly as long.

In 2019, Google claimed to have achieved quantum supremacy after its Sycamore processor performed a calculation in 200 seconds that would have taken the world's fastest supercomputer 10,000 years. Similar claims emerged from researchers at the University of Science and Technology in China in 2020 and 2021.

However, D-Wave maintains that it is the first to demonstrate quantum supremacy using a real-world problem with relevance to materials discovery, rather than a "random number generation of no practical value, " in the words of CEO Alan Baratz.

The paper demonstrated how D-Wave's Advantage2 processor was able to solve a simulation problem faster than Hewlett Packard Enterprise's Frontier, currently the second-most-powerful supercomputer in the world.

The 1,200-qubit Advantage2 processor used in the experiment became available through D-Wave's quantum cloud service in February 2024. While it is just a prototype, D-Wave said the design was based on years of client feedback.

"Having these systems in the hands of customers for the last 15 years has given us really invaluable insights into where we want to be investing resources, where we want to take the technology to drive performance for Advantage2," Andrew King, a senior distinguished scientist at D-Wave, told Barron's.

The research team identified two "fundamental pillars" of greater connectivity and greater coherence, which were the driving factors behind its work.

Connectivity is a measure of how many devices each quantum bit, or qubit, in the processor can connect to. D-Wave's Advantage system has 15-way connectivity, while the next-generation Advantage 2 processor has 20-way connectivity.

"The higher you can push this connectivity, the broader and richer the set of simulations and problems you can solve," King explained.

Coherence, meanwhile, is the ability of particles within a quantum system to exhibit multiple states at once, remaining linked even when far apart.

The experiment itself concerned the simulation of magnetic materials. While they may sound unglamorous, magnetic materials are everywhere. D-Wave chief scientist Mohammad Amin described how they can be found in nearly every component of a cellphone, from the battery to the microphone, and are a crucial component of certain medical imaging technologies.

"Simulating properties of materials can accelerate the discovery of materials, as you can find the property that you're looking for and fabricate the material and that could save a lot of time and money," Amin said.

Magnetic materials are governed by the laws of quantum mechanics, which makes simulating them on classical computers "practically impossible," Amin said. This is where quantum computing comes in.

CEO Baratz stressed that the latest development was "the holy grail, in the sense that we have been able to solve an important, useful real-world problem that cannot be solved by classical computers."

Not everyone agreed with D-Wave's Baratz. Researchers at the Flatiron Institute's Center for Computational Quantum Physics submitted a paper last week asserting that D-Wave's claims of quantum supremacy were outdated.

D-Wave was using the most powerful classical computer available at the time, but even better machines have emerged since then, researchers led by Joseph Tindall argued.

HPE's Frontier was the most powerful supercomputer in the world until November 2024, when it was bested by another HPE machine, El Capitan. Tindall and his colleagues said the advent of most powerful classical systems disproves their supposed weakness in materials simulations.

D-Wave's claims come weeks after Microsoft and Amazon unveiled their own quantum processors. On the heels of those announcements, specialists with Yardeni Research asserted that, in the David-versus-Goliath battle for quantum dominance, "Goliath appears to be winning."

"In some sense, the smaller companies have their work cut out for them against the big companies that maybe have deeper pockets and more longevity," Baratz told Barron's.

The CEO has regularly acknowledged intensifying competition in the industry, but maintains that D-Wave has a leg up.

The most striking difference lies in D-Wave's approach to quantum technology. The company uses an annealing quantum architecture, which is easier to scale than the gate-based quantum favored by competitors such as IBM and Rigetti Computing.

D-Wave has deployed five generations of annealing technology and is at work on Advantage2, which will be the sixth. As the only quantum computing company to do so, this puts D-Wave "in a league of its own," Baratz said.

"As we look to the future, we've actually started working on new types of applications that are enabled by this (quantum) supremacy work, in some very important areas including AI," the CEO said.