Quantum Computing — Technology that changes the rules of the game
Or: The key to infinity
This article was origininally published on our webside https://mk-vc.com in 2021.
How it all began
For over 100 years, physicists have been researching quantum technology. Max Planck recognized that atoms can only invent themselves in fixed energy levels. Matter and radiation can therefore exchange energy only in certain discrete portions: quanta. This phenomenon is comparable to a volume control on an amplifier that only locks in at certain values. “I think I can safely say no one understands quantum mechanics,” said American Nobel laureate Richard Feynmann. Still, in 1981, he introduced the idea of computing with quanta. The crazy thing about the quantum world is that a particle, or a qubit in quantum language, can assume two states simultaneously. The apple can be ripe or unripe, depending on how you look at it. Only when you ask the qubit, you get 0 or 1 as a binary result.
An Austrian
The first quantum facility was built by the Austrian Rainer Blatt. In a vacuum chamber, the physicist bombarded calcium ions with laser light and was able to show what energy is needed for the calcium ions to move to a higher level. If less energy is supplied, the qubit assumes two states, in the binary 0 and 1. If you look at two qubits, it is possible to display 4 numbers simultaneously. With each qubit more, the number space doubles.
The race
The race for the most powerful computer is in full swing. Google has been claiming so-called quantum supremacy, i.e. superiority over the best conventional computer, for its quantum computer Sycamore since 2019. Sycamore was able to solve the mathematical problem in three minutes and 20 seconds using 53 qubits (the 54th qubit did not work). Conventional computers would have taken more than 10,000 years. The computational superiority is disputed by competitor IBM, since it was a task optimized for the Google calculator and circumvented its weaknesses. Despite all the discussion, it can be noted that the swap file needed to simulate Sycamore’s 53 active qubits requires 80 petabytes of disk space. If all 54 qubits had been actively working at Sycamore, 160 PB of storage would have been required. The Summit supercomputer served as the model computer.
To simulate 73 qubits, for example, the best supercomputer actually needs 10,000 years plus a hard disk capacity of 80 zettabytes. Google and IBM should therefore already have correspondingly large chips in development.
The investor’s view
From an investor’s perspective, quantum technology is at a turning point. The pure laboratory stage has been left behind and the first substantial sales are being generated. An important driver is the competition between the USA and China. In August, it was announced that the U.S. government, together with the Department of Energy and the National Science Foundation, will support 12 research institutions in the field of artificial intelligence and quantum with an additional $1 billion over the next 5 years. In 2018, the Trump administration had already approved an additional $1.2 billion.
DARPA — a driver of innovation
DARPA (Defense Advanced Research Projects Agency) is funding military research for innovative and unprecedented technologies. The goal of the U.S. agency is to ensure that the U.S. military has access to new technologies such as quantum computing and artificial intelligence. Under the former U.S. president Donald Trump, DARPA’s budget has grown by nearly 20% annually to $3.6 billion. Many commercial technologies have their roots in DARPA-funded projects.
The U.S. Department of Energy (Fermilab) is taking the lead on the $115 million National Quantum Information Science Research Center to build a revolutionary quantum computer with Rigetti Computing, Northwestern University, NASA and other partners.
High expectations for the EU — “Quantum strategy is of paramount importance,” said French President Macron.
It is expected in Europe to keep up with the competition, thanks to some startups and IBM. The Finnish-German startup IQM , Austria’s AQT or Switzerland’s Terra Quantum are the European pioneers. The French President Emmanuel Macron recently presented a national strategy for quantum technologies with a five-year €1.8 billion plan which aims to finance research in quantum computing, communications and sensing.
Germany has reserved EUR 2 billion for quantum research in its economic stimulus package. There seems to be no shortage of money. However, Jan Götz, CEO of IQM, says that qualified personnel is a big problem (source here). Looking at the current state of school education, there is certainly no improvement in sight in the next few years and the “war for talent” is likely to increase.
The concentrated power from China
And China? It is well known that the Chinese state has set itself the goal of becoming the leading nation in the field of quantum technology by 2030. China is investing ten billion dollars for this purpose. The chances are not bad. With over 600 patents between 2012 and 2017, China achieved around 43 percent of all global quantum technology patents, with an upward trend (source here). In addition, China is keeping leading Internet companies Tencent, Alibaba, Baidu as well as Huawei to invest massively in quantum computing. The internal budgets for quantum technology of these tech giants might be expected in the billions.
MK Ventures search for Quantum
Despite our investment in Rigetti Computing, we have expanded our investments in the quantum ecosystem. For our second venture capital fund of funds we selected the French VC fund Quantonation, which is focused on four themes: Deep Physics, Quantum Sensing, Quantum Computing and Quantum Cybersecurity & Communications.
Mato Krahl, MK Venture Capital, Munich
