- Quantum computing is threatening today’s encryption standards sooner than expected
- Google and Cloudflare accelerate PQC migration goals to 2029
- Organizations should prioritize PQC spending alongside AI
Credit rating giant Moody’s Ratings has warned that organizations may underestimate how quickly quantum computers can threaten current encryption standards, to the point that slow post-quantum encryption adoption could even pose a credit risk.
And industry giants are already starting to recognize this, with Google and Cloudflare moving their targets to 2029 – a seriously big shift compared to the US government’s 2035 target for national security systems.
With these changes showing that some of the world’s most sophisticated internet infrastructure companies are concerned about the speed of change, Moody’s argues that companies may no longer have the decade or more they thought to upgrade.
Strategic investments will secure systems before PQC is a major risk
Currently, most internet security depends on public key cryptography. This includes online banking, payment platforms, digital identities, VPNs and secure public systems.
However, quantum computers threaten this because algorithms like Shor’s Algorithm could theoretically solve problems much, much faster than classical computers, essentially breaking the cryptography and allowing access for attackers.
Until recently, we thought that millions of qubits would be needed before quantum systems were able to break current encryption standards, but it has been revealed that around 10,000 qubits are sufficient to perform Shor’s algorithm against today’s encryption standards.
Beyond that, about 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 that it would accelerate its PQC migration goal to 2029. Cloudflare followed suit in April, mirroring this 2029 goal. “This indicates that two of the world’s most technically sophisticated Internet infrastructure operators have separately concluded that their existing planning horizons are no longer adequate,” the company noted.
Why PQC spend is as important as investing in AI
With AI budgets dominating IT spending, Moody’s now suggests that PQC spending can compete with existing AI and IT budgets, but only if companies fully understand the risks. This is because AI investments provide opportunities for revenue growth and productivity improvements, but PQC migration does not unlock additional revenue or demonstrate tangible benefits to customers.
However, getting into the action early might actually be the smarter move. The company predicts that PQC migration could account for 2.5% of annual IT budgets now, but those who delay until 2030 could spend twice as much to catch up.
Alarmingly, Moody’s warns of a ‘harvest now, decrypt later’ threat. Attackers can now steal encrypted data, 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 will need to adjust their infrastructure strategies to adapt. While a current cryptographic connection requires about 64 bytes, hybrid PQC connections require about 1,568 bytes – a 24x increase in the amount of data transmitted.
As a result, the likes of Google, Cloudflare, and others will need to continue building AI infrastructure while upgrading post-quantum crypto infrastructure.
While the immediate, transformative potential of AI investment is undeniable, this shift serves as a reminder not to ignore the threat quantum computing poses to current cryptography.
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