MITRE Grand Challenges Power Hour: The Specter of a Quantum Winter
(bright music) - Welcome to MITRE's Grand Challenges Power Hour: The Specter of a Quantum Winter. The hype surrounding quantum technologies in general and quantum computing in particular has reached a fairly feverous pitch. A recent survey of decision-making leaders at large global corporations indicated that about 74% of those enterprises have adopted or planned to adopt quantum computing.
And over 80% believe that the quantum computing is going to give them a competitive advantage within just the next five years. Unfortunately, if that advantage fails to materialize, well, there's some concern that we'll experience what is referred to as a quantum winter, which the investment will disappear. Enthusiasm will plummet, opening doors to other nations to take the lead in the race for quantum technologies. So among those topics today, we're going to examine how and what that might happen if this quantum advantage doesn't materialize on that timescales by bringing together experts across the government industry and academia to speak on the impacts to our economy, the global competition, the national defense and others. Before we begin, we're gonna have a keynote speaker followed by a panel.
Before we begin, I just want to put in a couple of quick housekeeping notes. First of all, this event is actually open to the public and open to the press, so please keep that in mind when commenting in the chat and posting questions to our speakers, particularly with any proprietary or other sensitive information. If you're interested more broadly in helping us solve some of these big challenges, we'd love to hear from you and MITRE is in fact hiring in this and many other areas. You could reach us, reach out to us at recruiting help, all one word, email@example.com for more information.
And then lastly, we're gonna have a link with information about each one of our speakers today. We'll be in the chat and we look forward to a very robust and engaging conversation. So please put any questions that you have into the chat. We'll be moderating them throughout the discussion as appropriate. So without any further ado, let me introduce our keynote note, Dr. Celia Merzbacher.
Dr. Merzbacher is presently the Executive Director of the Quantum Economic Development Consortium, frequently referred to as QED-C, which is a global consortium of over 250 stakeholders from industry, academia, and government that aims to grow the quantum industry and its associated supply chain for the betterment of both our national security and our economy. Before that, she was the Vice President for the Innovative Partnerships at the Semiconductor Research Corporation, which is of course a a consortium within the semiconductor industry. And from 2003 to 2008, she was the Assistant Director for Technology Research and Development at the White House Office of Science and Technology Policy, OSTP, where she led the National Nanotechnology Initiative.
So welcome Dr. Merzbacher. It's great that you're joining us today and let me turn the presentation over for your keynote. - Thank you, Carl.
As Carl said, I'm the Executive Director of the QED-C and I'm not gonna really spend any time talking about QED-C today. I am really gonna talk about the quantum winter question. QED-C, as Carl mentioned, is a consortium of stakeholders from across the quantum ecosystem. We have now pushing 250 members and that's from sort of the top of the stack, software companies even end users down to companies that make components and critically enabling technologies that go into quantum systems.
And we have universities and FFRDCs as members as well. We partner closely with the government agencies. We were really created, in fact to provide channels for industry to inform government, government to inform industry and so on. So I feel like I'm sort of sitting in this catbird seat and have a really good eye across the whole community, the global community. So when I was asked to give a set of keynote remarks on the topic of the quantum winter, I thought I would be happy to share with you my perspective and I'll qualify that it is certainly my perspective. QED-C is not a government agency and I certainly don't represent the US government.
So we have seen winters before and I went to Wikipedia and found this description of the AI winter. That's one that I think many are familiar with and when you sort of read about what happened to cause that winter and in fact there were I think some would say multiple AI winters over quite a few decades, it was this chain reaction that was a cascade of sort of perspectives and events. First, there was some pessimism in the community itself and then that sort of trickled out into the general press. There were cuts in funding that followed and ultimately that really caused a decrease in the amount of research.
And so that sort of series of events is what I was thinking I would look for in the quantum space and see if there are any signs that we're maybe approaching a quantum winter. So these are the signs of a winter, the promises may be exaggerated, there's a hype at the beginning and as Carl mentioned, it seems like we're maybe seeing some of that and I think we're all sensing that and I have some evidence on whether that's the case and then those expectations aren't being met. Investors pull back, and in the case of quantum, there's even the possibility I think that government may actively want to hamper progress.
And so I'll talk a little bit about that as well and then give an assessment at the end whether I think there are signs of winter. So what are the signs of hype? Well, one that I sometimes jokingly say is the first business that's revenue generating in a new emerging technology area is conference event planners and people who make money off of conferences. And this is a website that a private individual maintains. I give the link there. He has, I went in today and looked up how many conferences he has listed just for 2023.
It's 161 and counting. That's approximately the total number that he listed last year. It's not necessarily a complete list, but it's whatever he is aware of.
This is the list just for January of 2023 and so that's sort of one indication certainly of sort of enthusiasm among the technical community because they're getting together and talking about this field actively. And another, and I have some sort of fun slides here, sign is how quantum gets sort of embraced as a marketing tool. And so I went online and I found that I'm not endorsing any products and I have no relationship with any of these companies. These were just images I found on the web. But quantum is being stuck on as a label onto all kinds of products from ant bait here on the left and your dishwashing detergent and even paint products at the bottom there.
Then there are health related effects associated with quantum and you can find these products, even horse extract or something that's helpful for the horse community is being labeled with quantum. So lots of products in the health aisle. My favorite perhaps the quantum spirits that you can buy apparently.
And finally a number of, again, back to sort of health related aspects, the quantum eyecare at the top left, the one on the right here, I kind of like. Quantum pendant with scalar energy and anti-radiation properties. Sometimes like the one at the bottom, which is some kind of blood warming device is just using quantum, you know, as a sort of tech label. And finally I think my favorite is the quantum nuke. And you can find this for $700, apparently you can have it delivered to whoever you want.
So there's a lot of hype that's evident I guess because of that, the use of the term. But in fact, you know, are expectations being met? And now I'll get into the more serious part of the presentation. There's been a lot of promise described in the area of quantum and companies are in fact reporting progress.
And so here are some characters that many of you know. We've got Dario Gil on the left, Jay Gambetta in the middle, and Jerry Tao on the right. All IBM folks associated with IBM's quantum team. And this is a little bit dated now, it's from November, 2022, unveiling their 400 qubit plus processor, the next generation. So they've published a roadmap or part of their roadmap and they're marching along it. And so that's showing that in fact the expectations are being met and the progress is being made.
Similarly, Quantinuum, which is using trapped ions as their qubit technology in June of last year announced a milestone that they met. And so I would say that on the private sector side, there are reports that are encouraging. Progress is being made, expectations being met in the investor world. So now one of the sort of characteristics of the winter, were pulling back on the investor side and I'll talk a little bit first about private investors and then public.
So this report just came out this week from McKinsey. It's an update of their quantum tech monitor and they reported that investments have gone pretty flat in terms of the startup investment space. So I mean, it's almost in the noise. They said a 1% increase, but it's pretty flat between 2021 and 2022 and a significant fraction they report 75% is towards quantum computing startups. Quantum of course has application not only in computing but in sensing, communication, cybersecurity and so on. But the investors are particularly attracted to investments in the quantum computing space, presumably because they see the potential for very large returns in that space.
So dollar wise, it seems a little flat. In terms of the number of deals, those are in fact trending down over several years. So the largest number here that they report, and they kind of qualify all of this at the top left here, not exhaustive, but in 2018 they reported 58 startup investment deals.
And although there was a little uptick in '21, it seems to be trending down since then, but the dollars are flat, so the size of the individual deals are larger and you know, you can sort of speculate a little bit about why that, what that might mean. And here they say 80% of startups founded in the past three years are in the quantum computing space. So these are again, McKinsey's hypotheses on what's causing this slowdown. A lack of talent possibly, all the sort of really good people are already funded or have already spun out. And so there's a lack of of people to do startups, fewer use cases. So this would speak to perhaps expectations not being met and then investors preferring to invest in scale up.
Certainly investors like to minimize risk. And so if there are opportunities to deploy their capital towards something that they think is farther along and more likely to yield returns, then they would be attracted to those. So there may be less deals going to the earliest stage ideas. On the government side, the National Quantum Initiative reports every year their budgets they report, they break them out for three agencies in particular, NIST, NSF, and Department of Energy Office of Science and those are shown here from the most recent ones.
So it came out in January and it reports the, as you can see on these year over year numbers for up to through 2021, they have actual budget numbers, 2022 because they collected the data during 2022 are estimated, and then the proposed budgets for '23 are included here. So they're not apples to apples between those last three years' columns and Congress often allocates or appropriates more funding than is requested, especially in these emerging technology areas. So if you go back and look at how a proposed budget turned into an estimated budget and then an actual budget over years, often it does increase. But nevertheless, if you just sort of eyeball these histograms, things are trending up into the right year over year.
That's for these three agencies. Interestingly, they also report in this same document, the total amount and they divide it up according to what they call program component areas. And you can see down here at the bottom it's sensing, computing, networking, quantum advances, I think that's more sort of broad fundamental work and quantum technology. So they came up with these five categories.
Nevertheless, when you look at these totals, the total height of the histogram does go down a little bit in 2023. Again, it could increase once we get the actual appropriations, but that sort of is a little bit of a flattening. And these include budget figures from more than just NIST, DOE and NSF. It also includes other agencies including DOD, which is a significant funder.
So is the government pulling back? I don't think so, and I don't think they will for a number of reasons. There's both the global competitiveness side, the sort of economic benefit. We want to be the leader in this emerging technology area. And there's a national security side, I think most of you're aware of that a sufficiently powerful quantum computer can break encryption.
We've known that since the mid nineties when Peter Shor discovered his algorithm and published it. And so again, there are these sort of national security issues that are ensuring or causing the government to want to make sure that the US remains a leader or the leader. Okay, so budgets have grown mostly.
Well, China is the adversary that's sort of out there these days. And this is a paper that was, or a report that came out in January. It actually reports on delivering a working quantum computer by a company in China to a Chinese customer. But when you go and read these reports, it was actually delivered sometime last year in 2022. So China has an active industry as well that's being supported and that government is helping to bring forward.
And so there's competition out there. And again, this sort of, I think underpins some of the sense that the government investment, the public investment, both in the US and other countries, not just China but around the world, are likely to continue to be strong. Well, the fact that China is aggressively pursuing this technology and in some areas like quantum networking and communications, they have reported demonstrations of capabilities that could be arguably ahead of the US. Meanwhile, our regulators, the export control folks are considering putting export controls on quantum computing. And this is from a online magazine Protocol from last November where it was reported that commerce is contemplating a fresh set of export controls around quantum. Now there are actually some export controls today that were imposed on Russia and Belarus.
And so we could look at those and say, well, what if China was sort of added to the same type of control. There are also, of course, as many of you are aware, controls, very targeted controls put on advanced semiconductors last fall and those showed some somewhat narrow and targeted control approaches that were taken by the Department of Commerce. So those might be a model for what we would expect in the area of quantum computing. QED-C members are actually meeting and discussing industry concerns and what impacts might be if certain kinds of controls were placed on the industry by the US government and we're sharing that information with the regulators. So signs of winter? Are we seeing the signs or not? Promise is exaggerated, there's a lot of hype, but I think that there's also a lot of credible reporting going on and it's a very broad set of activities.
So if you're a good consumer of news, you should listen to more than one source. And I think that it's not just a matter of sort of everyone jumping on a bandwagon. I think there are, you know, when you get into business it's important to be sort of credible.
And so while you want to be an optimist and enthusiastic and make, you know, paint as optimistic a picture as possible, in some sense it does need to be underpinned with reality. Expectations aren't being met. I put a red X on this one. I think expectations so far are generally being met. There's a lot of uncertainty about the timelines and exactly what use cases are going to emerge and emerge first. But progress is certainly being made and reported.
Investors pulling back, I don't see that today. There's a flattening on the private side, but I think that that isn't necessarily because of concerns about the technology. I think that there's still a lot of mismatch between traditional venture type investors and the timelines of some of these.
And also as we may hear from some of the other speakers today, there are technology needs that are not billion dollar companies. They're the sort of enabling technology layer that may create more modest returns and whether those are gonna be investments that the venture community wants to make or not, maybe a role for government there as well. And then finally this idea that government is maybe gonna hamper progress through imposition of controls. I think that government needs to be very careful about using export control authorities. You can slow down the adversary but you can slow down yourself. And so I think that trade off on protecting and at the same time potentially hampering progress is something that needs to be considered carefully here.
So QED-C did a survey last year. It was actually a quantum computing market assessment and you can see that report on the QED-C publications webpage. I just took this because one of the questions at the end of the survey was, so do you think there's gonna be a quantum winter? And these are the results. We've done this survey three years in a row now. And so blue bars here were the answers to this question in 2020, orange is 2021 and gray is 2022. So if you sort of step back and eyeball this, it seems that in 2020 the biggest bar was over here, very high chance, highly likely, but there was a distribution of responses.
We had about 150 responses. In a year later 2021, things had shifted more towards the left, the center of mass here. And I haven't done any kind of figure of merit trying to weight average these responses. But the answer is more towards the somewhat unlikely.
And in 2022 I would say it's even more so somewhat unlikely. So experts perceive a lower threat of quantum winter. For what it's worth, it's a sample of people who are pretty embedded in this world and so I think that's another piece of information to consider. So this is my test of how many of you are followers of pulp movies, but the one thing that we know is that after winter there's spring and in the spring there will be growth. So I'll leave it to you all to put in the chat if you know what movie this is from, but that's my sort of thoughts on the subject of quantum winter. And if you have questions, I'm happy to, for you to contact me directly.
You can find out more about QED-C and some of the reports I referenced on our website. Thank you. - Thank you very much Celia, for an engaging presentation. We're getting responses to your movie question, "Being There."
- Good. (laughs) - So apparently the MITRE staff can pass the obscure cultural reference question with flying colors and it also is nice to show that the system is actually working. I don't have a lot of questions as yet, but let me ask one myself. So I'll exercise the moderator's prerogative. The survey that you conducted aside and the data that you're collecting from your consortium and membership, which part of your presentation do you think would be most indicative of a problem if one were to arise? Where would you most likely see it coming first? Would you think of it in terms of is the investment question the right way to think about it? Or would it be more along the lines of government regulation or concern about, you know? - Well, I mean, I will tell you one thing that I think is concerning and there are others who are really in the middle of the business world more than I am, but, and I didn't refer to the fact that over the last couple of years several companies have gone public and some of them aren't really flourishing. And if a company that, you know, chose that path ends up having to declare bankruptcy or you know, somehow really disappear, you know, fail, I think that would be, that would send a signal that was interpreted very broadly that maybe shouldn't be.
So I think that would be something to watch for because I think that would convey, now, you know, we had other things happening that were not quantum specific like Silicon Valley Bank and how is that impacting this, these emerging technologies? Not just quantum others as well. Is it drying things up? Is it making it harder? I do hear a lot of concern from the small companies that are members of the consortium about their ability to fundraise and whether that's going to get harder and harder because I think access to capital is really critical and that's really based on belief and some confidence. But in the case of an emerging technology, it's not really based on the fact that there's existing revenue models. You know, this is not make me an app and it's gonna have a network effect and we're all gonna make a lot of money.
So sort of these small, sometimes marginal or peripheral events I think could impact the field and create an accelerating effect that would maybe not be based on the technology itself even. I worry about that more than the technology. I think the science is gonna continue to advance and understandings will grow. But whether we're gonna have a winter, like AI, you know, now we're kind of back on top with AI. I don't know, I'd be interested in other thoughts on that as well. - So it's interesting if I understand your answer correctly, it's almost as though you, an indicator might be not the declining in entry investment, but rather the acceleration of exits in terms of companies' bankruptcies and other people who are failing out of the field.
- Right, right. I mean these numbers where it shows some kind of decrease, I'm not sure that indicates anything to do with the technology. I think it can be due to other reasons. Luke may have something he wants to add when you get to the panel or open it up more. - Well, there are some questions online about the realistic applications for the technology and how many qubits are we gonna need before something, you know, something gets productized.
I don't know if Yaakov is expecting to cover that during the panel or not, but certainly happy to to have you comment on that, Celia, also a number of people have asked for the link from the page in your presentation. I don't know if you sent that to Ty or EJ. We'd like to make sure we get that published out. I know you flashed on the screen quickly, but we'd like to shove it in the chat quick.
- Okay, yep, I will make sure it gets there. - Thank you. - In terms of what is going to, how we're gonna sort of see technology advancing and when is it gonna cross some line that is quantum advantage, that quantum provides an advantage over classical technology? There's a couple of, there's a lot of uncertainty as to when on the time curve that might happen. I think it will happen, but there's a couple reasons that make it hard to predict. One is it's a hard problem.
I mean, there are some significant challenges to scaling up a quantum computer. There are several different technologies being developed and we may end up with more than one type of quantum computer with sort of applications or abilities, capabilities that are better for certain types of problems or certain form factors or whatever. And then there's the fact that the classical technology keeps improving as well. So that also pushes up and out the crossover to quantum advantage. And I think another thing, and this is where I think we kind of sometimes have blinders on, and that is we're not necessarily just, well, we definitely are not trying to just do some existing problem faster.
This is not extending Moore's law per se. This is shining light on a whole base of problems that is really intractable today. And so thinking, and that's where I think there's a lot of interest and curiosity and maybe being able to do some things with these relatively noisy low performing machines that might not be easily done with conventional or classical technology. When we asked companies what kind of jobs they were looking to fill in the next few years, quantum algorithm developer was one of the most frequently checked boxes by the companies.
So developing a quantum algorithm is going to require thinking differently. And if you're in a company that's developing, you know, pharmaceuticals or looking at financial portfolio analysis or some other logistics problem or something, or materials design and development, you need to have people who are able to really come at it with fresh eyes and I think that gets back to some of the workforce development and how students are being trained at universities and so on. And that's another area, of course, where government investment has a big role to play. - Well, that's a great comment.
Well, let me end here and thank our speaker again, our keynote. I really hope you'll stick around with the panel. I'm sure Yaakov will welcome your participation in that. Let me take a moment to introduce Dr. Yaakov Weinstein,
who presently serves, has been at MITRE for over 15 years and serves as the Chief Scientist for Quantum Technology here within MITRE Labs, who's going to introduce the panel and moderate the rest of the session. So Yaakov, over to you. - Thank you so much, Carl. I welcome everyone to the Specter of a Quantum Winter panel.
So first order of business, let me just go around the virtual room here and have everyone introduce themselves. Luke, let's start with with you. - I'm happy to be here. Thank you, Yaakov.
And so I'm the founder of Montana Instruments. Montana Instruments builds cryogenic systems for quantum applications. I originally founded the company I've sold now just as of four or five months now.
So I'm looking at next things, but I come from the supply chain. Montana Instruments would be a good example of a quantum supply chain company, thanks. - [Yaakov] Great, thank you, Luke, and Bob? Bob Sutor. - Hi, I'm Bob Sutor, I'm vice president and oh, the title du jour is Chief Quantum Advocate, I was- - [Yaakov] Great title. - I was at IBM for many years, including the last five or six years in the IBM Quantum program where I was one of the leaders of that. I've written a couple of books on quantum.
Generally speaking, quantum is hard and explaining it to people can also be hard at times, but I think valuable and well, and this part is saying is, you know, quantum does not equal quantum computing and whatever the specter of a quantum computing winter may be, there's absolutely no winter on quantum sensing and quantum communication. - [Yaakov] Very good, all right. Don't give away the answer yet. We've got a whole panel to go still. Okay, Mike, please.
- Hi, thank you Yaakov, and it's great to be here today. It's an honor to be part of this panel. My title's not nearly as cool as Bob's, but I am the Deputy Director at the AFRL information Directorate and I also coordinate the Quantum Information Science Program across the AFRL enterprise, which Bob was kind of alluding to is more than quantum computing and includes timing, sensing, networking, as well as computing. - [Yaakov] Great, thanks, Mike.
Brandon? - Hi, I'm Brandon Rodenburg. I run the Quantum Technologies Group here at MITRE. So for those of you outside of MITRE, we're the ones running this Power Hour.
MITRE operates FFRDCs, which are research and development centers that operate on the public interests. So for the government, my team is responsible for expertise in things like quantum computing, quantum networking, and to a lesser extent 'cause we have a separate group for it, quantum sensing, primarily offering advice and research to various parts of the US government. - Great, thank you, Brandon. Okay, so start with our first question. You know, Celia already highlighted that over the past couple of years there's been $4.5 billion investments in quantum startups.
In addition, in the McKinsey reports that Celia mentioned, they estimated that the US government has spent $3.7 billion in total so far over for quantum technologies. Mike, you know, AFRL as a distinguished part of our US government and certainly one that has invested in quantum heavily. Let's start with you, like, is it that exciting? Is quantum really that important? - Absolutely and I think, you know, from the Air Force perspective, we've been invested in quantum for many years. You know, it's not like we just started doing quantum, we can go back to our history and in a lot of different areas and certainly, you know, quantum 1.0 and the different application areas.
But certainly we see when we talk about our program operational viewpoints, operational requirements that quantum will be meeting and it's not gonna happen tomorrow for all technologies. But we do see things like timing and sensing where you can really apply it to PNT positioning, navigation and timing problem where you might be in a contested GPS environment where you need alternative means. And in quantum we'll be able to do that for you. And the good news is, you know, we're able to demonstrate some technologies right now that are doing just that. It's gonna take us awhile to field systems, but we see that as a near term point.
And then a little further out computing and networking, we're gonna get there but certainly on the computing side, we're looking at, you know, Celia kind of alluded to this more on the algorithm side where we're relying on industry, develop the hardware, but we're right now partnered with some companies out there such as IBM and INQ and having access to their cloud systems and you know, looking at what problems would be of interest to the Air Force where we can actually make a difference. And then certainly, you know, we see networking as a really exciting technology. Obviously the security aspect comes first to mind, but also how can you tie together different quantum computers, network 'em together? Whether it's on a small scale or a larger scale, and then as we talk about clocks and sensors and time distribution, you know, that's where we see a network coming into play as well. So we have active researcher areas across seven of our nine technology directorates in AFRL. So certainly, you know, we've been investing heavily and we continue to be in quantum for the long haul. - Great, Brandon, let me turn the question over to you and ask it a little bit differently.
So AFRL, of course, is a research based laboratory, one of the best in the country without question as an FFRDC, MITRE presumably speaks to government agencies that are not particularly interested in research per se, but in practical technologies, what do you see in terms of excitement within quantum technologies and throughout the government? - Yeah, that's a good question. So there's certainly a lot of interest just from the hype that we're all worried about here. So first and foremost, going back many years, a lot of the questions we have fielded were along the lines of what the heck is this quantum thing and what could it possibly do for us? I think there's a lot of excitement in computing specifically in part because of that how big of a part it plays sort of in the hype cycle. And so, you know, it's easier to connect the dots without necessarily understanding what the key applications will be in computing just because we've sort of lived through a century of computing transforming our world. And so if you say you have sort of the next generation of computing, I think it's easy for people to imagine it'll have an impact, even if they don't know specifically where it'll have an impact in.
But especially more in the short term where specific operational environments are being thought of and the specific scenarios are being thought of. The quantum sensing is something that is very exciting in the government space. As Mike mentioned, we've kind of gone through sort of the quantum 1.0, arguably things like atomic clocks and things like this are the cornerstone of a lot of our modern society both sort of in the government space, the national security spaces and in the private world as well. And so there's a lot of interest in sort of, well, sensors have really transformed a lot of parts in our society. What could sort of next generation versions of these look like? Whether it's better sensitivity or whether it's sort of getting similar performance that we currently see in very large strategic systems, turning that into much smaller systems that you can then sort of deploy more cheaply or more easily in more platforms.
- Sure. And Bob, you're representing the industry, you've been part of IBM and now Infleqtion slash ColdQuanta. What do you see as excitements both within your industry and from current and potential customers? - So I continue to be excited about the, if you will, the new modalities that are being introduced for quantum. So when I was with IBM, we did superconducting, many other people do that as well, Google and so forth. And in fact, one of the things that intrigued me about ColdQuanta at the time was the idea of cold or neutral atoms, which I will admit to knowing virtually nothing about before they contacted me.
And, but what I also realized with that versus some of the other things we had heard about such as ion traps, maybe photonic, was that there really were a number of up and coming technologies that were going to hit at certain times, but later than the noisy original ones and even some of them, like ion trap, I mean, people were doing 20 years ago and things like this. So as we look out into the future, you're going to see technologies which maybe don't compare well to some of the others today, but they will compare better in the future, but they'll have different uses, right? So not every single, let me call it a qubit today, will end up in a big quantum computer, a super computer in a data center. And in fact we don't need that. We need things like quantum memory, right? As we broaden and we think of quantum sensors. You know, quantum sensors are a great, great way of getting quantum encoded data, which is actually very hard classically but relatively easy to do from a sensor perspective.
And that data is going to need computation and it's going to need to be done at the edge. So if we go back and we look at the history of computing, you know, we're not all dealing with great big monster computers somewhere, right? With the high priests and priestesses. Computing becomes ubiquitous or at least spreads out. The same is gonna be happening, so I think the people who are looking beyond the data center, just as they are with AI, federated AI, federated learning and things like that, to the edge at least we'll be able to pull this technology forward as we go and this will drive quantum networking, which will be absolutely essential and we'll understand better which technology is best for which uses. - Great, thank you. And Luke, you started a company to support the quantum ecosystem, not even a quantum company, certainly you must have seen some excitement there.
What did you see? (chuckles) - Yeah, it's interesting. When I started Montana Instruments, quantum wasn't something we were talking about at that time. This was in 2010. So then fast forward five years and we wake up one morning and I realize 95% of our customers are developing quantum materials.
And I guess that's when we realized, oh, we're a quantum company. (laughs) And you know, we made a definite pivot, right? In our approach, in our communication, in our direction at that point as well as we realized that and just grew it. And then that we still, we just saw many of our customers in the university were going out, spinning off, starting new companies, and then they were getting funded and then all of a sudden, you know, we're not just serving academics, but we're serving big and small companies all of a sudden all over the world. So we saw that transition ourselves and I come from the supply chain, of course, and cryogenics, that's one area. There are, you know, when you think of photonics, you think of cryogenics, you think of electronics. And the point I'll probably stress later on in our talking today is we have to realize this is a research industry, it's not a real supply chain yet.
That supply chain has to be built beginning now. And so we've, when we look at quantum computing and even quantum sensing, we've kind of cobbled together whatever we can do with a bunch of research instruments, right? And there there are, you know, even if we were to solve the challenge of error corrections say of quantum computing, we could all of a sudden scale qubits from that perspective. We still can't scale because of the components, because of even the non quantum components that, you know, you can't imagine scaling to a million low noise amplifiers, right? Size, you know, a few milliwatts of power each one, right? And so there are many reasons why that supply chain I think needs to be in a greater focus now for us today, anticipating quantum advantage within the next several years and then moving on from that. - Thank you. So let's start approaching the question du jour, the specter of a quantum winter.
So besides the statistics that Carl quoted at the beginning of the session, the McKinsey report also notes that, suggests that by the year 2035, the economic impact of quantum computing alone will be between 0.6 and $1.2 trillion. That's trillion with a T. That's a really large number, besides the fact that, you know, 50% of all quantum companies surveyed by Zapata already have a million dollars invested in quantum computing and are expecting a business advantage within five years.
Celia very nicely outlined her thoughts on whether there's a quantum winter starting. I want to know more, not is there one starting, but are we setting ourselves up for a quantum winter, perhaps starting soon, perhaps starting a few years down the line? So Bob, you already hinted in your first answer towards this. - Right. - So let's start with you. How is quantum sensing gonna save us or is that the answer you want to give? (laughs) - Well, I mean, addressing the whole winter thing, I have known for years that people who, not everybody, but many people who do quantum startups feel that they should be immune to the normal startup failure rate, right? So if 70 to 90% of all startups fail, they kind of say, but we're doing quantum and quantum is so great, none of us should fail, right? And it's like, (laughs) I looked at them and say, this whole thing is kind of new to you, right? You know, this idea here. And so in fact, you know, a certain amount of failure represents progress as the good players get sorted out with the right technologies and the right management and things like that.
So sometimes it's a little, makes me a little nervous that some of them go, don't go away, if you will. And I'm sure they do very, very quietly. A lot of this is perception.
So years ago, you know, I remember very clearly because, look, IBM tries to be very honest, you know, as Celia pointed out, they have a roadmap and they point these things out and they said, "Don't expect this before then," but it tends to be perceived like, okay, so you're going on vacation with a child and you put the child in the backseat of a car and you say this is going to take three hours to drive there and after 15 minutes your kid says, "Are we there yet?" You say, "No, I told you it was going to be three hours," but the kid says "But I wanna be there," you know, and the kid, if he or she knew better would say, we must be in a vacation winter, right? Because I wanna be there and we're not, right? Even though everyone said that this was going to take awhile. I think on the investment front, we're well into the second or third generation of many investments. Yes, the SPACs for the most part, majority of them didn't go too well, ultimately, but SPACs in general, right? And so for everything on the investment side you can say, well, gee, maybe quantum investment isn't as great, but we had this amazing tech downturn in the last year, why should quantum be immune from that? The Silicon Valley Bank, you know, take that money, put it under the mattress so it's not just quantum again and things like that. So I would say things are generally proceeding, but people are getting smarter about two things. One is, as I mentioned before, the breadth of applicability of quantum technologies.
And we're reminding them that things like MRIs are quantum technologies. They've been around for 40 years, right? This isn't some brand new impossible thing and people are starting to learn that's not just qubits, right? It's qubits and qubits get connected to other qubits and we have to build these things up and connectivity becomes important and networking things and, oh, repeaters, routers. (laughs) You know, all these standard computing things. So as people get into this, I think they will understand there's a wealth of work and research that's being done on the large picture, not just does this one set of qubits solve any one problem.
That whole infrastructure I think is moving along nicely with investment and with an increasing amount of government investment primarily due to geopolitical events. - Okay, so if I could just summarize, so you're confident that the educational objectives that the community has been putting forward in that this is going to take a long time, this is something that is not, you know, that already has capabilities in the field and we need some more time to develop some of these new capabilities that that message is coming across and you're not concerned that investors are gonna start pulling back or that people are going to start dropping interest in quantum despite the fact that you would expect, and we all expect that certain number of startups will in fact fail. Is that a fair answer? - Yeah, I do think seed money will continue, small amounts of seed money, right? I think investors will double down on their existing investments for companies that can prove that they've made themselves and proving is not marketing, right? Just to be clear about that.
So if they can demonstrate real progress, then they'll continue to get done. - Awesome. Luke, you've been doing a lot of thinking about the quantum winter and dual use quantum, especially in the context of the QED-C. What do you think about, are we setting ourselves up for, to drop in the high hype cycle here? - Well, okay, I think I don't really see a quantum winter at least not like a Montana winter. (Yaakov laughs) Maybe some cooling, right? And I like what Bob said about the ecosystem, like this whole entire system of technologies that are interconnected and dependent upon each other that we're building an ecosystem now and that is gonna take time.
I think I, I like to watch, I mean, there are a lot of great quantum companies out there. I like to watch IBM for instance because they don't have to, they don't have to make any promises. They don't have to impress anybody. They don't have to raise money, right? They're a big ship.
They've set their rudder and their direction, their roadmap and they tend to be hitting it and you know, they've got the Grand Challenge, a hundred qubits by a hundred gates and that seems to be on track. So I think that we'll see in the next one to two years some results that actually demonstrate that quantum computing is real. Now, the general public won't be all that impressed because it'll probably be for some obscure chemistry application or something like that that doesn't really affect them, they don't think about, right? But it'll be for us and in the community we'll realize this is significant and when those first applications happen, I think what's gonna be interesting is that when quantum advantage starts to turn and we see that those first applications are actually happening, then we're probably going to be discovering new solution sets to new problems that maybe we hadn't thought about before. And it might still be obscure, but it'll take on a new life of its own in development and I guess that's where the quantum algorithm developers come in that earlier comment there. So I think we'll see that and we've talked about quantum sensing and I think that there's a lot of advance that can be made there.
And then I'll come back to also just reiterate the importance of building an ecosystem. If you look at the quantum supply chain, it's totally not ready, right? And it's not just that the technologies are not ready, the companies are not ready. Many of the companies there are smaller companies.
They might be mom and pop shop oriented. It might be a lifestyle company, it might be small. If quantum computing needed to scale up now, a lot of those companies would just break 'cause they're not OEMs.
So that foundational work I think is really important for us to be doing now and the government has a definite role in that. Investors aren't ready to just jump in and start funding supply chain companies when we don't even know what the ROI is or when that's gonna happen, so I guess one point I'll make is the government really needs to, I think take the role of a de-risker and if they do that right, for every dollar that the government puts out, it could there be two or five or 10 that come from private industry. That's what we want to do over the next 10 years, I think. - Thank you, Luke. So Brandon, I'm not gonna ask you to compare, you know, your home state of Nebraska's winters to Montana's winters, but you speak to government people. Is government up to be patient or is government the child in the back of the car who's gonna complain after 15 minutes that we're not there yet? - Yeah, I really think it depends on who you're talking to.
At some sense, the government has been funding quantum for decades now, and really a lot of the stuff that we've seen grow in the last 10 years has come from a very long history of putting money into basic research and into academia and really from the government's perspective, at least from these sort of very deep research long-term view perspective of some of the agencies within the government, the thing that's new is you're starting to see the center of mass shift from sort of that academic basic research into industry, which is exactly what ultimately we want these technologies to do. So I think that now there are a lot more people within the government who are now thinking about quantum than 10, 20 years ago who were the people sort of funding the research and they're going to have different priorities and some of them, you know, have budget cycles on the order of a year or mission statements that they're trying to, mission problems they're trying to solve on the order of, you know, know three years. And so for some of these parts of the government, there might be a mismatch in expectations with the quantum. No, we really are five years out.
We really are 10 years out on some of these things. So I'm sorry, we're not going to save the day on your mission that you're going to fly, you know, in six months. But really we're thinking the next generation of problems or the next generation of, you know, airplanes, or the next generation of things that we're trying to solve and we're trying to solve those now because that's just how this works. So I think as long as we have that perspective, I think that at least on the public side, I think that we're pretty healthy.
We always have the advantage of, we don't actually have to worry too much about return on investment, you know, too soon we can really invest in generational problems in the public sector. - Okay, and Mike, I'm not gonna say anything about the winters in Rome except to note that I'm coming to visit you in June, but what, you know, obviously you're working on heading a major effort at a research based laboratory. Let me fit in at least one of the questions from our audience.
What are some of the milestones that you're looking to demonstrate to the Air Force in general? How do you convince when you have officers or even perhaps the Secretary of the Air Force come into Rome, how do you convince them that this is really worthwhile in that? - Yeah, sure. - Make sure they don't 'cause the quantum winter by bringing that up. - No, that's a great question and I think one of my jobs is to really, and it's not just me, it's a team from across and for all, is to really go out and educate the senior leadership, I think I mentioned that early on about the hype because they get companies coming in all the time, including the Secretary of the Air Force, all right, trying to sell him something and that happens all across the Air Force and the Space Force. So we get kind of turned to as the trusted agents, if you will, to kind of sort through all that hype and what's real and we do that and you know, in that we also have to have a vision, right? So when will this happen? When will we have results? And we're trying to step through that very smartly in terms of our roadmaps, you know, like with timing and sensing, those are near term applications. So we partnered just this past summer with some international partners and Army and Navy and did some demonstrations at sea on how you can take some technology that isn't ready for primetime yet. There's no way it's ready yet, but you know, how can we look at some supply chain things, some marketization issues and really start moving it out because it is like, as was said earlier, it's a continuous research cycle but we have to not be afraid to move things out from the lab either, right? We have to do it smartly.
We also did some work earlier this year, last summer actually in fall on drone and how we could do some entanglement distribution and we're gonna look to build upon that. We learned a lot and we're gonna continue to work with some of our partners out there and doing things like that. So it's taking those steps and kind of, you know, what we call spiral development in the government, having off ramps. But we always have to caveat that with that, you know, it's not gonna be one and done. It's gonna be a continuous research program that we need and we have to be in for the long haul.
One of the things I always like to talk about, a former boss of mine, director here in Rome used to say, "It takes 20 years to be an overnight success," and it's so true. I used to have a great slide on that and I know he stole a quote from someone, but it's true and you know, we're fortunate we're a research lab to be able to do that. But you know, it's gonna take investment for the long haul and I liked what was said earlier too by Luke about being a de-risker in the government and that is something, you know, we do here take quite seriously.
For example, like our quantum networking program, we're looking at different modalities of qubits, you know, certainly not gonna pick one winner for quantum networking. Each has, the ones we're looking at has strengths, it has current weaknesses, but how can we look at research and to transduction being able to go between the different qubits? So I think that's where we have a role. Things like our SBIR STRR programs help de-risk the technology.
We had a large quantum collider event two years ago and some of the things I talked about actually spun out of that event, so if we can do more things like that in the future and encourage folks to partner with AFWERX and StratFly and TechFly where it matches Air Force investment with some VC investment, you can get some real money there as well, but it helps de-risk some of the technology for maybe some of the investors out there. - Great, and so let me, going back to the milestones though, so demonstrations, you know, demonstrations first of the technology themselves, demonstrations that there are a number of different possible ways to reach a goal and that we're moving forward not only on one technology, but really exploring a number in order to lower the risk as much as possible because those are not necessarily concrete milestones, but are those useful ways and constructive ways to keep interest within government and perhaps in within the public? - Absolutely, and I will say, you know, we have internal roadmaps though where we do set specific targets, specific goals and not necessarily gonna be operational requirements where we're putting something on a platform, right? I don't know, an F-35 tomorrow. But down the line we can envision applications where that would happen, but you have to kind of have those stepping stones and milestones to get you there. So we do have a strategy that we follow with goals and milestones and keeping in mind that, yes, we have to, you know, we're not a pure research lab, we're not academia. We have to solve ultimately Air Force problems in the end.
- Great. Is Celia still online? Do you think I could grab Celia for a second? If she appears then we can, oh, okay, great. So Celia, let me ask you before, as we're going on here, so Bob, you know, correctly mentioned the fact that startups don't all succeed, even if they do think they all should succeed, they don't. What happens when 70 to 90% of the startups fail? Now, they also, it's obviously not gonna happen like that overnight, but as membership in QED-C perhaps doesn't always continue to increase, but but starts perhaps going down, if even moderately. Are we concerned about not a run on Silicon Valley Bank, but a run away from quantum? - Well, I guess I think that the equation has more terms than just the current existing startup group, right? So they're gonna not all go through, but there are gonna be new ones coming along and I see that happening all around the world.
I mean, the UK has a very robust program that's generated quite a few interesting startups, so I feel like, you know, the pipeline, you want to make sure the pipeline continues to be robust. And if you're investing as much as is being invested in the fundamental early stage work that governments are, there will be a continuous stream, I think, of new ideas and people willing to take a bet on them. I asked this, I've been doing research since I was asked to be on this panel and one of the opportunities I had to do that I was at the University of Maryland Quantum Startup Foundry event last week, and I asked this question of a panel that I was host or moderating, and one of the responses was that, you know, a winter now and then was kind of healthy. It causes pruning and it gets rid of the weak (laughs) parts of the ecosystem that really, it serves a purpose, if you will, or the Valley of Death does that on a regular basis. - [Yaakov] Right.
- So, you know, I'm not the one who's out there, it's not my company that's failing, obviously, I'm looking at this as like epidemiology. You're looking at the whole population here and seeing a way that organically it's staying healthy. I think the government needs to be very careful. There are proposals and I think DOD even has some kind of set aside maybe for swooping in and rescuing failing entities in order that they won't be bought by someone who would take the technology elsewhere and the people, the talent. So that's a complicated policy question, frankly, because not every failing activity should be rescued.
And so how you go about deciding what's critical, both from a security point of view as well as from a technology? It's a good idea. It just needs a little bit more runway to get off the ground. It's hard to say. - Great. So Luke, let me to turn to you for a second. 'cause you first mentioned the government role in a significant way.
What happens if we are faced with a quantum winter? Like, what's the risk? Why should the governments be concerned or perhaps not concerned about the possibility? - If the government just really significantly slowed down or stopped funding in quantum, then a lot of the small companies that depend on that would just go away, right? And because then you're dependent 100% on some other industry, right? Which is, okay, so I mean, I can come back to that, but all you'd have is the large companies who have, you know, who are generating revenue, enough revenue elsewhere to maintain R&D around quantum, right? And then they would have their own reasons for doing that, right? So I guess that's the, right now, so my advice, my advice to a company that's in the quantum industry and especially many of these quantum supply chain companies, is the healthiest way to exist right now is to be, is to have your foot in another industry as well. And you think of photonics, you think of cryogenics, you think of electronics. All these technologies can reach across broad industries. It might be the aerospace industry, it might be the medical industry. Of course, research is part of that, but that's the government funded portion of it.
So make sure that you've got a market there and you're developing a market there, and you've got cash flow there, right? Because that's gonna allow your company to be healthy, but then position yourself and continually position yourself in the quantum industry. And hopefully there's a little bit of revenue there. Hopefully there's some market there and you've got some relationships with the customers there. And hopefully there's a research, right now, most of that's a research industry right now, right? Most of that work for those players. But I think the advice is position yourself there so that