This is part of IEEE Spectrum's special report: Winners & Losers VII

D-Wave Systems, a Canadian start-up, recently booted up a custom-built, multimillion-dollar, liquid-helium-cooled beast of a computer that it says runs on quantum mechanics.

That's right. D-Wave, a 55-person company operating out of an office park in Burnaby, B.C., claims to have built that almost mythical machine, that holy grail of computing, the stuff of sci-fi novels and technothrillers—the quantum computer. Such a system would exploit the bizarre physics that apply on ridiculously small scales to compute ridiculously fast, solving problems that could stymie today's supercomputers for the lifetime of the universe.

Now, building a practical quantum computer has proved hard. Really hard. Despite efforts by some of the world's top physicists and engineers and the likes of IBM, HP, and NEC, progress has been slow. Ask the experts and they'll tell you these systems are a decade—or five—away.

Yet D-Wave believes it can build them now. It has raised some US $65 million from investors that include Goldman Sachs and Draper Fisher Jurvetson, enlisted collaborators from Google and NASA, amassed 50 patents, and transformed its offices into a world-class quantum lab.

Is Schrödinger's cat really out of the bag?

To put things in perspective, consider that one of the most celebrated feats in quantum computing is the factoring of the number 15 (yep, that'd be 3 times 5). The problem is that today's state-of-the-art quantum systems can juggle only a handful of quantum bits, or qubits—the fundamental units of information in quantum computers. Whereas a conventional bit can be in one of two states, 0 or 1, a qubit can be 0, 1, or a superposition of 0 and 1. By linking and manipulating qubits, you can carry out quantum algorithms that solve problems in fewer steps and thus faster than with regular computers. With enough qubits—hundreds to thousands—quantum computers would be able to crack some of the hardest codes, search databases superquickly, and simulate complex quantum systems such as biomolecules.

Rather than build a multipurpose quantum computer, D-Wave says it is building a specialized one, designed to solve specific math problems that have applications in science and business. Its current system has 128 qubits, which the company claims are enough for a research device, one that probably won't beat a powerful PC. To solve larger problems and outperform conventional computers, D-Wave plans to scale up to tens of thousands of qubits in the next two years, eventually reaching millions of qubits.

But experts are skeptical that D-Wave's quantum computer is really, well, quantum.

"If this were the real thing, we would know about it," says Christopher Monroe, a quantum-computing researcher at the University of Maryland, in College Park. He says D-Wave hasn't demonstrated "signatures" believed to be essential to quantum computers, such as entanglement, a coupling between qubits.

Paul Benioff, a physicist who pioneered quantum computing at Argonne National Laboratory, in Illinois, notes that even the best prototypes can't keep more than 10 qubits in entangled states for long. "Because of this I am very skeptical of D-Wave's claims that it has produced a 128-qubit quantum computer," he says, adding that talk of reaching 10 000 qubits at this point is "advertising hype."

Anthony Leggett, a physicist at the University of Illinois at Urbana-Champaign and a Nobel laureate in physics, says that D-Wave has made claims that "have not been generally regarded as substantiated in the community."

But it's all for real, says Geordie Rose, the cofounder and chief technology officer of D-Wave. "We are making good progress," he says, explaining that they are currently testing three 128-qubit systems, to be installed at institutions that will use them for research.