- Quantum computing is threatening current encryption standards faster than expected
- Google and Cloudflare accelerate PQC migration goals through 2029
- Organizations should prioritize spending on PQC alongside AI
Credit rating giant Moody’s Ratings has warned that organizations could be underestimating how quickly quantum computing could threaten current encryption standards, to the point that the slow adoption of post-quantum cryptography could even pose a credit risk.
And industry giants are already starting to recognize this: Google and Cloudflare have moved their goals to 2029, a really big change from the US government’s 2035 goal for national security systems.
As these changes show that some of the world’s most sophisticated Internet infrastructure companies are concerned about the speed of change, Moody’s maintains that companies may no longer have the decade or more they planned to upgrade.
Strategic investment will protect systems before PQC is a significant risk
Currently, most Internet security depends on public key cryptography. This includes online banking, payment platforms, digital identities, VPNs and secure government systems.
However, quantum computers threaten this because, in theory, algorithms like Shor’s algorithm could solve problems much, much faster than classical computers, essentially breaking cryptography and allowing attackers access.
Until recently, we thought that millions of qubits would be needed before quantum systems could break current encryption standards, but it has been revealed that around 10,000 qubits are enough to run Shor’s algorithm with current encryption standards.
Beyond that, around 26,000 qubits could potentially break P-256, a standardized elliptic curve algorithm commonly used in financial services and government systems.
The report references Google Quantum AI research, which points to a 20-fold decrease in computing resources required to break secure elliptic curve cryptography compared to previous estimates.
In March 2026, Google announced it would accelerate its PQC migration target to 2029. Cloudflare followed suit in April, mirroring that target to 2029. “This indicates that two of the world’s most technically sophisticated Internet infrastructure operators have separately concluded that their current planning horizon is no longer adequate,” the company said.
Why spending on PQC is as important as investing in AI
With AI budgets dominating IT spending, Moody’s now suggests that PQC spending could compete with existing AI and IT budgets, but only if companies fully understand the risks. This is because investments in AI offer opportunities for revenue growth and productivity improvements, but the PQC migration does not generate additional revenue or show tangible benefits for customers.
However, jumping into action early could be the smartest decision. The company predicts that PQC migration could account for 2.5% of annual IT budgets today, but those who delay until 2030 could spend twice as much trying to catch up.
Alarmingly, Moody’s warns of the threat of “harvest now, decipher later.” Attackers can steal encrypted data now, archive it, and wait for future quantum systems to be able to decrypt the information.
As for costs, the White House previously estimated that migrating federal systems could cost about $7.1 billion over 10 years.
The secondary problem, the report warns, is that hyperscalers would need to adjust their infrastructure strategies to adapt. While a current crypto connection requires around 64 bytes, hybrid PQC connections require around 1568 bytes, a 24-fold increase in the volume of data being transmitted.
As a result, companies like Google, Cloudflare, and others will have to continue developing AI infrastructure while also upgrading infrastructure for post-quantum cryptography.
While the immediate transformative potential of investing in AI is undeniable, this shift serves as a reminder that the threat that quantum computing poses to today’s cryptography should not be ignored.
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