completed its $24 million series A funding round and
raised $18 million in series A funding.
U.S. tech venture capital company Differential Ventures led the recent $6 million seed extension round for quantum software company Agnostiq which it will use to accelerate further development and commercialization of its enterprise-grade quantum and high-performance computing platform Covalent.
In this Q&A, Differential founding partner David Magerman explains why investors are throwing their weight behind commercial quantum now.
Enter Quantum: Was Differential’s recent Agnostiq funding round your first investment in quantum?
David Magerman: We’ve been involved with Agnostiq for a while, and we invested
What made Agnostiq a good fit?
They started out working on security for protecting quantum circuits in the cloud because until there's scalable hardware, all the quantum research done by companies will be in the cloud. They pivoted to working on a software package that helped integrate classical high-performance computing algorithms with quantum.
Companies understand they need to get familiar and comfortable with quantum and build up research efforts but they don't know how quickly that process will happen, or how quickly it'll evolve into a scalable hardware solution. In the meanwhile, they have tools to use with high-performance computing.
Agnostiq created a package that is a hybrid of high-performance classical computing orchestration but allows their customers to integrate quantum algorithms into their workflows in a way that will allow them to experiment with it at the early stage on the research side, and eventually scale up the production use of it when the hardware becomes more viable.
Most experts agree that commercial quantum computing is 10 to 15 years away. So why is now a good time for enterprises to start adopting quantum and investors to start investing?
The end of Moore's Law and the rapid expansion of classical computing in every industry under the sun, amplified by ChatGPT and large language models. We've been investing in AI for the last five years or so and have seen the interest in it going up, but with Moore's Law ending, it just doesn't scale. People are going to be clamoring for new ways to get more processing power out of less hardware and less time and the only real solution to that is alternative modalities of computing.
There's been enough research in the quantum area to show that theoretically, when the hardware catches up, there are certain kinds of programming that will be orders of magnitude to infinitely more efficient, meaning that they're not tractable now, and they will be tractable with quantum. Given that theoretically, it works, and given the history of human innovation, it's just a matter of enough human brain cells being devoted to trying to solve the problem. Now's the time to identify who the upstarts are, who the innovators are, and try to get a seed investor.
We take risks early, and we try to invest in companies in the nascent stages and we think this is a technology that is going to “hockey stick” at some point. You can mistime that by a little and still be okay, but in 10 to 15 years you’ve missed the boat. That’s when the customers will be demanding it en masse. But in terms of the innovative intellectual property coming out the next five years will be a really exciting time to be investing in the space.
Why is quantum computing as a service via the cloud important?
It's important at this stage because it's the only option out there. Most companies are not going to put meaningful intellectual property in the cloud; no assurances of security are going to justify that. But right now, the kinds of research going on is far from protected secrets, they’re more like basic algorithms trying to compare the performance of quantum solutions to classical solutions on toy problems because that's all you can do in the quantum space.
Right now, it's just a matter of its easier to get access in the cloud than to think about spending a few million or tens of millions to buy a quantum computer now. If you are motivated to spend on the research you can use the cloud environment as a stepping stone to justify that expenditure.
If you can convince yourself that having proprietary access to a quantum computer at the scale they are now, if you can justify that that's going to give you a meaningful advantage over your competition in the next few years, that's the kind of research expense that multibillion-dollar corporations make. But even for very wealthy companies, you still want to have that proof of concept. And that's where the cloud computing environment comes in.
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