Microsoft’s Quantum Computing Breakthrough Presents Major(ana) Risks

Microsoft’s Quantum Computing Breakthrough Presents Major(ana) Risks

In February 2025, Microsoft unveiled Majorana 1 – the first quantum processor powered by topological qubits – significantly increasing computer processing power and marking a notable milestone in quantum computing. For cybersecurity and risk professionals, however, this development presents significant internal and third-party risks, as quantum computers can make current data encryption methods obsolete. 

Encryption works by scrambling data using a secret ‘key’: only a person with the right ‘key’ can unscramble and read it. Some modern encryption methods, such as elliptic curve cryptography (ECC) and Rivest-Shamir-Adleman (RSA), rely on the factors of very large numbers for their ‘key’. These encryption algorithms widely underpin current data security, due to the computational difficulty of factoring large numbers: the data is safe, because of the inability of traditional computers to bypass it. Quantum computers, however, can factor large numbers exponentially faster than standard computers, making these common encryption models penetrable. As this technology nears its introduction into the market, with the reveal of Majorana 1, cybersecurity professionals should immediately start integrating quantum-resistant algorithms, given the ‘harvest now decrypt later’ (HNDL) strategy being used by adversaries. Attackers are currently collecting huge amounts of encrypted data, with the intention of waiting until quantum computers become available to decode it. For chief technology officers (CTOs) and third-party vendors, this poses severe risks to data-heavy and sensitive industries, such as finance, healthcare and governmental institutions.

The Allianz Risk Barometer found cybersecurity incidents to be the number one global risk in 2025 – and third-party vulnerabilities are a significant factor. The risk of unprepared third parties is illustrated by the National Public Data (NPD) breach in 2024. One of NPD’s third-party contractors failed to update their security patches in a timely fashion, enabling hackers to steal up to 2.9 billion records of sensitive customer data and sell these on the dark web. While NPD may have had data protection measures in place, the oversight of a third party led to hefty financial and reputational losses for the organization. Quantum computers can crack most current encryption algorithms, and third-party vendors holding proprietary data or intellectual property may thus become targets for quantum-powered cyber attacks in coming years, putting sensitive corporate assets at risk. Those that fail to start planning for cyber resilience will fall behind, risking the loss of sensitive data and of reputational, legal and compliance risks.

Quantum computing, with its ability to bypass traditional encryption algorithms, sits on the cusp of the transformation of global industries. Cybersecurity and risk professionals must proactively adopt quantum-safe standards, such as NIST’s Post-Quantum Encryption Standards, and work towards ethical collaboration under the European Declaration on Quantum Technologies, to reduce the risk of geopolitical quantum rivalry. Be sure to stay ahead, with more of our risk insights here.