Coherent Ising machines (CIMs) have emerged as specialized quantum hardware for large-scale combinatorial optimization. However, for large instances that remain challenging for classical methods, some platforms support only finite-precision inputs, and the required scaling and quantization can degrade solution quality. Dynamic portfolio optimization (DPO) can be formulated as a quadratic unconstrained binary optimization (QUBO) problem, but large instances are especially vulnerable to precision loss under global scaling. We propose a block coordinate descent method that decomposes the DPO model along the time dimension and iteratively solves compact time-block subproblems on the device. Experiments on finite-precision CIM hardware show that the method enables these instances to be solved under hardware precision limits, yields portfolios competitive with classical benchmark solvers, and reduces runtime through fast CIM solution of the resulting subproblems. These results demonstrate the promise of finite-precision CIMs as a practical and scalable approach to structured large-scale combinatorial optimization.
Coherent Ising machines (CIMs) have emerged as specialized quantum hardware for large-scale combinatorial optimization. However, for large instances that remain challenging for classical methods, some platforms support only finite-precision inputs, and the required scaling and quantization can degrade solution quality. Dynamic portfolio optimization (DPO) can be formulated as a quadratic unconstrained binary optimization (QUBO) problem, but large instances are especially vulnerable to precision loss under global scaling. We propose a block coordinate descent method that decomposes the DPO model along the time dimension and iteratively solves compact time-block subproblems on the device. Experiments on finite-precision CIM hardware show that the method enables these instances to be solved under hardware precision limits, yields portfolios competitive with classical benchmark solvers, and reduces runtime through fast CIM solution of the resulting subproblems. These results demonstrate the promise of finite-precision CIMs as a practical and scalable approach to structured large-scale combinatorial optimization.
We present a scalable, hardware-aware methodology for extending the Variational Quantum Eigensolver (VQE) to large, realistic Dynamic Portfolio Optimization (DPO) problems. Building on the scaling strategy from our previous work, where we tailored a VQE workflow to both the DPO formulation and the target QPU, we now put forward two significant advances. The first is the implementation of the Ising Sample-based Quantum Configuration Recovery (ISQR) routine, which improves solution quality in Quadratic Unconstrained Binary Optimization problems. The second is the use of the VQE Constrained method to decompose the optimization task, enabling us to handle DPO instances with more variables than the available qubits on current hardware. These advances, which are broadly applicable to other optimization problems, allow us to address a portfolio with a size relevant to the financial industry, consisting of up to 38 assets and covering the full Spanish stock index (IBEX 35). Our results, obtained on a real Quantum Processing Unit (IBM Fez), show that this tailored workflow achieves financial performance on par with classical methods while delivering a broader set of high-quality investment strategies, demonstrating a viable path towards obtaining practical advantage from quantum optimization in real financial applications.
For complex optimization problems in the financial services industry, specialized quantum computer can server as a transformative tool. Focusing on loan portfolio pricing optimization, we demonstrate the application potentials and advantages of quantum computing in financial optimization problems. For the first time, the loan portfolio pricing problem is modeled as a Quadratic Unconstrained Binary Optimization (QUBO) problem, and then solved by a specialized quantum computer, Coherent Ising Machine (CIM) based on optical dissipative systems. By introducing an auxiliary qubit and conducting a two-stage search for the appropriate penalty coefficients, we demonstrate the applicability and advantages of CIM in the loan portfolio pricing optimization problem. The experimental results demonstrate that compared to state-of-the-art classical solvers, CIM achieves significant acceleration capability and energy efficiency beyond classical methods. Furthermore, by conducting numerical and analytical evaluations of CIM’s scalability in the loan portfolio pricing optimization, we demonstrate the convergence guarantees of CIM and its ability to achieve a better solution quality than the state-of-the-art classical solver in large-scale problems.
Loan portfolio optimization (LPO) seeks portfolios that minimize credit risk while satisfying practical selection constraints. Accounting for portfolio-level risk requires modeling not only expected losses but also loss variability and borrower-default correlations, leading to a large-scale combinatorial optimization problem whose complexity grows rapidly with portfolio size. In this work, we formulate LPO as a Quadratic Constrained Binary Optimization (QCBO) problem that jointly captures expected and unexpected losses and transform the resulting formulation into a Quadratic Unconstrained Binary Optimization (QUBO) model suitable for variational quantum optimization. To address the limited qubit resources of current quantum hardware, we employ Pauli Correlation Encoding (PCE), which enables a large number of portfolio-selection variables to be represented using comparatively few qubits. The proposed framework is evaluated on a real-world microfinance dataset comprising 2012 borrowers. For problem instances with up to 1000 portfolio-selection variables, we benchmark classical simulations of a variational quantum algorithm (VQA) against Google OR-Tools under matched time budgets, obtaining feasible portfolios with an objective-value gap of about 40% across all sizes. We further implement the framework on superconducting quantum hardware for instances containing up to 1500 variables. Across these instances, the experimentally obtained objective values are within 10% of the corresponding simulation results. These findings demonstrate the feasibility of applying PCE-based variational quantum optimization to large-scale loan portfolio optimization under current quantum hardware limitations.
Quantum Optimization (QO) is emerging as a promising approach to tackle hard combinatorial optimization problems by leveraging the unique computational properties of quantum hardware. In recent years, QO has gained traction in Machine Learning (ML), where problems such as clustering and vector quantization can be naturally expressed as Quadratic Unconstrained Binary Optimization (QUBO) problems. These ML applications often involve complex, high-dimensional data, which directly influences both the structure and scale of the resulting QUBO formulations. However, current quantum devices fall under the category of Noisy Intermediate-Scale Quantum (NISQ) hardware, which imposes significant limitations on qubit counts and small error rates. This dissertation investigates the impact of data complexity and data scale—as encountered in ML settings—on the effectiveness and feasibility of QO on NISQ devices. We propose novel, hardware-aware methods to overcome these challenges. The first part of this thesis focuses on the effect of data complexity for QO. We analyze how problem structure—particularly when QUBO formulations are derived from ML tasks—affects quantum solvability. We identify the spectral gap as a key factor in the success of adiabatic quantum algorithms and provide a theoretical and empirical analysis linking data-induced complexity to optimization performance.To address noise sensitivity and limited precision, we introduce a preprocessing framework based on a principled Branch-and-Bound algorithm that reduces dynamic range while preserving global optima. This improves robustness on both quantum annealers and classical solvers. In the second part, the thesis addresses challenges introduced by data scale. First, we propose a recursive Divide-and-Conquer strategy that breaks down large QUBO problems into tractable subproblems, demonstrated through an application to Bundle Adjustment in 3D scene reconstruction. Second, we introduce a variable and constraint generation method inspired by column generation for Integer Linear Programming, enabling dynamic QUBO size growth. This technique is successfully applied to Multi-Agent Pathfinding, where it scales well on NISQ devices while maintaining compatibility with classical solvers. Finally, we explore QUBO reformulations that reduce problem size through compact encodings and cyclic expansion, enabling the use of quantum hardware for tasks such as FPGA placement in chip design. Across all contributions, the developed algorithms are evaluated both theoretically and empirically, with experiments conducted on real quantum and quantum-inspired hardware. These methods significantly improve solution quality, scalability, and hardware compatibility, paving the way for more effective use of QO in practical settings. While tailored for NISQ era constraints, the results remain relevant for fault-tolerant quantum computing, offering insights into the long-term viability of QO across hardware generations.
The Ising machine, as a quantum-inspired computing system, can be used to efficiently solve combinatorial optimization problems. Ongoing studies have positioned it to potentially surpass the performance limitations of traditional computers. However, such Ising machines also suffer from scalability as the solution quality becomes sub-optimal when the problem size increases. In this work, we propose an Ising-based framework that uses a distributed Ising algorithm to find the near-optimal solution for large-scale Max-Cut problems through parallel processing via graph segmentation and reassembly. We selected the coherent Ising machine as the hardware solver and successfully found the solution for a 2000-node instance utilizing 20 computational bits on the Gset standard dataset. Additionally, we investigated the key factors influencing the system's performance and discovered that setting the number of reorganizations to one results in higher accuracy. Building on this configuration, we utilized a 100-bit CIM hardware platform (CPQC-1) to solve instances with varying numbers of nodes. The experimental results agree well with the theoretical simulations, confirming the practical feasibility of our method. Moreover, compared to existing Ising-based solvers, our algorithm significantly reduces computational resource requirements while achieving superior performance on large-scale combinatorial optimization problems, highlighting its effectiveness on quantum-inspired hardware.
Airfoil shape optimization presents a challenge where classical solvers frequently struggle with computational efficiency and local minima. In the promising paradigm of quantum computing, the coherent Ising machine (CIM), a specialized physical solver, offers acceleration capabilities. However, its native discrete binary architecture restricts the application in aerodynamic design. To bridge this gap, we propose a comprehensive framework that translates airfoil shape optimization into hardware-compliant quadratic unconstrained binary optimization formulations. We integrate high-order response surface models via the Rosenberg order reduction, enabling the CIM to capture strong nonlinearities in the aerodynamic performance response. Furthermore, we introduce a block-diagonal scalarization strategy that compose trade-off scenarios into a single optimization. Validated on the NACA 4-digit airfoil series using CIM hardware with 615 spins, the framework successfully locates the global optimum with a computational speedup of three orders of magnitude compared to the classical simulated annealing. The parallel embedding capacity allows for the extraction of an entire optimal Pareto front in a single hardware execution. This work demonstrates a viable, quantum-enhanced paradigm for engineering optimization.