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The Quiet Revolutionaries
We recently wrote about Quantum Computing, Inc (QUBT), an early stage company trading on the Nasdaq over-the-counter market planning to move up to a main market listing. You can read that note here. The business is notable for three things.
One, it has developed quantum application accelerator software tools, and is developing services to bridge the worlds of quantum and classical computing, with no additional programming needed to run across either flavor of abacus.
Two, while the company says they have top-tier buyers engaged, they are only just now taking their solution to market and are thus pre-revenue.
And three, it has a partnership with Amazon AWS enabling AWS’ “Braket” service to offer third party quantum compute services at scale.
Oh, also, four, it is the least salesy company we have ever met in our decades of investing experience. We don't mean reverse-selling humblebrag. We mean, seriously downplaying matters. Which, since most times in investing it is better to assume it is Opposite Day, serves only to pique our interest further.
If you think those four points don’t quite square away, you would be right. Huge potential, completely downplayed.
We don't own QUBT in staff personal accounts, yet, but when the main market listing comes we do plan to open a starter position. With a pre-revenue company addressing a potentially new market like this, the span of outcomes ranges from huge win to big losses, and so we will size our positions accordingly. This will be a venture capital type investment that happens to have traded shares - a lot like the various space-sector SPAC names we cover in our three tiers of subscription services and own in staff personal accounts.
Following publication of that note above, the company reached out to us with an offer to speak once again to their CEO Robert Liscouski, together with Richard Moulds, GM at Amazon Braket. And how could we refuse? We took up the offer and we present a brief note of that conversation below for your consideration.
Moulds’ background is in cryptography and indeed he joined Amazon AWS on the cryptography side initially. Two years ago he moved toward the quantum project and fifteen months back, Amazon launched AWS Braket. Moulds is based in Seattle, the mother lode of computing-on-demand. He and his team have built Braket as a billing and reselling and routing entity. If you want to access quantum compute cycles, don’t want to build your own physics lab, and don’t want to have to deal direct with the multiple competing hardware vendors who do have their own physics lab (we aren’t talking blade servers here yet), you should call Moulds. Braket can pass your quantum program to D-Wave, Rigetti, or IonQ – these are the three privately-owned hardware vendors participating in the AWS program. Those vendors own and operate the systems but the AWS front end gives you the load balancing and billing service that you would expect. Braket’s ownership by AWS also means that the same provider can handle your quantum and classical requests, the abstraction in this case provided by QUBT. What we mean by "abstraction" here is that absent the use of QUBT technology, you have to put in a fair amount of additional programming time before you can submit problems to the underlying compute platforms. If, like us, you are old folks, you might think of QUBT as providing a compiler so that you can write your programs in something that the human mind can understand, rather than trying to write directly in machine code. This is far from a perfect analogy but you get the idea. (If you can think and write directly in machine code, reach out to us. We can definitely find something for you to do around here).
As we noted in January, QUBT remains on the trail of defining use cases. The hope for quantum is that it can solve multivariate problems faster and/or more efficiently than the classical equivalent. These might be inventory control, supply chain, distribution routing or other such constrained-optimization challenges. Whether quantum as a computing architecture can in fact deliver this or another kind of advantage is yet to be proven, and there are plenty of detractors. Now, again, we are old people here at Cestrian but not so old that we were writing about the Shockley lab or Fairchild Semiconductor or their progeny at the time they were bubbling up. We imagine that integrated circuits were also written off as “they’ll never work / scale / be affordable / have a use case.” Just like that famous IBM “there will only ever be a market for seven computers worldwide” line. So just because you have a whole lot of people saying quantum will be a bust, doesn’t mean it will be a bust. Between QUBT and AWS Braket, you have software and services that can interface with the real world of things in order to process instructions in the unreal quantum domain. So the challenge is on. Here we have two grownup executives heading up efforts to commercialize this new computing platform. This doesn’t happen often in one’s investing career, and we’re excited about it. Stay tuned as we continue to profile the progress of QUBT and with it the role of AWS in the company’s evolution.
And in the meantime, if you yourself are quantum-curious and your company has a business problem that may be solvable easier with probabilities than certainties – you might want to give QUBT or AWS a call. And if you do, let us know how you got on.
Cestrian Capital Research, Inc – 18 May 2021.