André König, CEO of Global Quantum Intelligence (GQI), is interviewed by Yuval Boger. Andre and Yuval discuss the increasing global interest in quantum technologies, the challenges of scaling and commercialization, and the evolving investment landscape. He also touches on the complexities of geopolitical strategies, including export and import controls, the rise of “quantum nationalism”, the need for startups to focus on specific use cases while also dreaming big, and much more.
Full Transcript
Yuval Boger: Hello, André, thank you for joining me today.
André König: Great to see you, Yuval. Great to see you.
Yuval: So who are you and what do you do?
André: Who I am, starting with the big questions? Well, for nearly five years, I have been a quantum technology expert, influencer, and entrepreneur. At least I try very hard to be. I’m originally from Germany, grew up all over Europe, and moved to the States. I now live in Miami Beach after 15 years in New York, 20 years ago. Spent kind of the first half of my career, a dozen years in management consulting. I’m a trained economist. The professional services side of my career still strongly influences me. And then when New York kind of started to have a little bit of a complex with Silicon Valley and the lack of startups in the city, I was asked by IBM to bring their first AI system, Watson, to market. This is now re-emerging with Watson X. I had an artificial intelligence startup for six years and had a small exit, after which I moved down here to Miami. One of my good friends and biggest clients, the CTO of one of the big Wall Street banks, whose opinion I trust very much, suggested that I look into quantum technologies. Physics has always interested me since high school. Mathematically, I wasn’t inclined to study it and tried again at MIT for a few months. I ended up with a number of certificates, but that was the best I could do. I found The Internet of Things, which is a type of crunch-based pitch book on quantum technology. I collected about 30,000 data points on food vendors, startups, investors, use cases, governments, universities, and quantum art. I competed with a few fine gentlemen, notably Doug Finke, who started the Quantum Computing Report in 2015, and David Shaw, who started Fact-Based Insight out of London with deep analysis of the quantum tech space. As of December of last year, 2022, we combined these three entities into a new one, Global Quantum Intelligence (GQI), of which I’m now the CEO. We work with vendors, but mostly with governments, users, and investors in the Quantum Tech Club.
Yuval: How global is Global Quantum Intelligence? What do you really cover in terms of geography?
André: It depends on who I talk to, and when I talk to the right people, I say we’re a little bit of a CIA of quantum technologies. That’s, of course, aspirational and exaggerated. It all starts with technology, and we’ve been building that since 2015. We have a number of different technology scrapers in around a dozen different languages. We have a list of proprietary sources, and we scrape quantum tech intelligence into our database, categorize it, label it, and visualize it, among other things. Then there’s a human element. I also started an organization called One Quantum a little over three years ago, which is a quantum tech community for humanity. We have chapters in over 21 countries, including the Women in Quantum chapter and a startup chapter. At GQI, we have teams in three countries: the UK, the US, and Southeast Asia. We’re eight full-time people, with clients on three continents and a network of two dozen freelancers that help us with projects in various geographies.
Yuval: For instance, if I’m a government entity and I’m worried about China, can you help me?
André: We can. Of course, you have to be careful when you work in quantum about who you talk to and what you say, but we do have relationships and geographies that are friendly across North America, Europe, Southeast Asia, and other places. We also have relationships in some geographies that might be considered less friendly or competitive, or even potential adversaries, not just China, but others as well. So we do get retained, and we’re actually working on a report for a European organization to provide that kind of analysis. We’re able to scrape all the public sources available, and we have large networks that range from students and interns to professors, entrepreneurs, investors, and even some government officials in these geographies.
What’s beautiful is that when you work in something like quantum technology, you develop a little bit of intuition for it. It takes only a few words from a person you’re talking to, and you’re able to put it into context, maybe mentally map it to a roadmap or strategy, and gain insights from just a few words that might be very meaningful. With a team like ours, developed over many years, you start to gather some interesting intelligence.
Yuval: Some say that there’s a rise in quantum nationalism, and I think it may go both ways. On one hand, there’s a discussion about export controls, determining which technology can be exported to which countries. But then when we look at some of the national programs, there also seem to be limitations on import controls, meaning that technology needs to come from within the EU or other specific regions. Do you think that governments that do that are serving their own interests well?
André: I think everybody is still figuring it out, be it business models, revenue models on the commercial side, or geopolitical strategies on the policy side. My home country, Germany of all places, shame on my people, put an export ban on Israeli technology or quantum technologies. And that was one of the very first in the industry, followed with a ban on foreign direct investments. In the US, of course, you have the CFIUS Act which talks about foreign control of entities and IPs and IP in the US, and now an export ban. We have six, seven government clients from innovation industry over military defense and two kind of the secret services on three continents, and I’m shocked by the disparity of, let me say, questions that we get from them. Some have very benign questions. “Hey, we’re trying to figure out how serious is quantum computing, or should we worry about this company more or this company more, and how close are they to a breakthrough quantum computer or sensor or encryption standard or whatever it might be.” And others have a lot more strategic intelligence and questioning, where they’re really interested in very specific people, assets, products, and are much more concerned about the bigger implications. So I think it’s still a game of figuring that out even at the federal level.
Yuval: Some people say that quantum computers are useless today. I mean, they’re useless in the sense that there’s pretty much nothing you can do on a quantum computer that you cannot do classically. Now, that may change in two years or five years or 10 years, depending on who you believe. But if that’s the case, why do you think countries are trying to buy quantum computers to jump-start their national quantum programs?
André: I think it’s a little bit of FOMO, fear of missing out, and a little bit of smart planning. Back to my example of Germany, there was a statement a few years ago by a government official saying that Germany as an industrial nation missed out on the digital revolution, the internet, artificial intelligence, and blockchain (I’m not sure how blockchain went). “We cannot afford to make this mistake on the next big technology,” which has been identified as quantum technology. I think from that standpoint, that’s a bold bet and a little bit of a fear of missing out. At the same time, what’s the alternative for a country like Germany and many others when you look at where growth and innovation will come from, which is what you need to thrive and survive in this complex political world, right?
At the same time, you and I share a large enthusiasm for quantum technologies; we believe it might potentially be life-changing, right? And you have to make that bet. And I think we all agree that unlike other technologies, quantum technologies have a lower on-ramp. You can’t just buy a team of developers, sign up for the IBM cloud, and suddenly be quantum-ready as a user. It takes an intellectual effort, first of all, it takes a human resource effort, and then it takes a lot of trial and error, which takes time. So I think from the standpoint of smart planning, many people and regions and countries realize that they need to position themselves accordingly.
Yuval: Your partner, David Shaw, and you guys do a lot of analysis on technology. What’s your bet on the leading modalities for quantum computing?
André: I was laughing with your previous question because just this morning, somebody, one of our clients, a Fortune 500 company, sent me a paper by Matthias Troyer from Microsoft Corporation, an extremely well-respected researcher and technologist. He argued that we might not be seeing any real use cases in quantum other than in chemistry, which might be possible. Dr. Preskill, maybe the most respected and well-known scientist in quantum technology a few months ago, published a paper saying that all the use cases in quantum chemistry that we ever talked about are impossible. So before we look at modality or what type of quantum computing architecture, I think there’s still a lot of work to be done in understanding computational complexity and how we’re going to apply that to industrial, business, and geopolitical problems or opportunities. I think there will be room for many different architectures to do that, be it on-premise or in the cloud, be it on a ship, be it analog and hybrid, like I know you are doing on your road towards digital, which has the advantage of delivering results today already, right, and specific problem sets.
Who the winner will be? I don’t think there will be an overall winner. Of course, we all dream of, you know, a topological back to Microsoft or photonic quantum computer that is unlimited, less scalable, and powerful. But reality is always more practical, and there’ll be a lot of room for many. We know the issues: superconducting is hard to scale, trapped ions I struggle to understand, neutral atoms, that is kind of where all the hype and attention is right now and for good reason, and photonics and spin qubits we’re still waiting a little bit, right? So that race is still too early to call in my opinion.
Yuval: You have venture capital clients as well, and when you think about starting a new company in the quantum space, where do you see opportunities? Is it in a new quantum modality? Is it in quantum sensing? Is it in key distribution? Is it in the application layer? Are there one or two areas that stand out to you as ripe for innovation for startup companies?
André: I’m going to answer that irrespective of the type of quantum technology. What I miss the most in quantum and really across computing, quantum cryptography, or sensors is extreme focus. And I did startups for 10 years before getting into quantum. I was a startup mentor at Techstars and other ventures. My personal lesson, and many might disagree, is that the more a startup focuses, the higher the odds of success are, because you can always land and expand. If you’re successful with one specific use case, it is much easier and much more credible to expand from there. And we don’t see that very much yet.
Just yesterday, I spoke with friends that you know who are focused on quantum computing solutions for the cargo industry and logistics. They are trying to raise a small round of money. They have a very narrow use case and they have 800 contacts in their database in that industry. They have a dozen proofs of concepts in that industry. They just have a really nice story and also positioning in this cargo space to do what they’re doing. We don’t see that enough yet, in my opinion, in quantum, where companies just narrowly focus on a specific use case and try to own that.
At the same time, I’m going to contradict myself. The other thing that I’m missing in quantum, and again, it doesn’t matter if it’s computation, sensors, or cryptography, is the bold entrepreneur, a Tony Stark-like figure we have in the movies, somebody who thinks ridiculously big and is not afraid to tackle a grand idea. I had a post on my movie that just came out on Netflix, “Heart of Stone,” which is about a quantum computer called the “Heart.” The quantum computer is exactly that; it is the heart of an entirely new infrastructure in this not-so-futuristic world 10-15 years from now. I don’t know enough people that are working on this concept of the heart of quantum computing. So I’d like to see both of those extremes.
Yuval: And on sensing and communication, do you feel that they’re much closer to being market-ready than quantum computers?
André: Yeah, we just published our Outlook report series, the quantum sensing report, and it is fascinating. Many are familiar with the use cases in medical applications, scanners, mining and resources, of course, positioning systems, but there are also use cases in neurology, for example, and brain interfaces. Some really fun, weird, interesting stuff where you see entrepreneurs like the ones I just mentioned dreaming big and going after their specific niche. So those markets are a lot more mature. The technology is much less susceptible to some of the scaling and error issues that we know from quantum computing. The overall market is much smaller, so it’s a little more challenging to be successful there. But it is an exciting space where I think the average maturity of a vendor is a little ahead of what we see in quantum computing.
Quantum cryptography, or quantum-safe cryptography, is a different story. It’s a huge addressable market, and of course, the overall cybersecurity market is quite mature. But I think there’s a bit of trepidation in the market. We know of about BD vendors in this space that go after post-quantum cryptography (PQC) with software-based solutions, quantum key distribution (QKD) with hardware-based solutions, and then there are platforms and other hybrid offerings out there. The technology, as we’ve seen from NIST, the National Institute of Standards and Technology, hasn’t proven to be super reliable. NIST says, “Don’t worry, we’re going to come up with the next round, and everything will be fine.” But something as critical as infrastructure and the security of our infrastructure, be it private or public, needs more certainty, more trust, more standards, and more regulation to facilitate the industrial and commercial rollout of the technology. I think that’s the biggest missing piece that nobody has tackled yet.
Yuval: You’ve been covering quantum for, I think you said, five years. What have you learned in the last six months that’s new? What are the latest trends, in your opinion, in quantum?
André: In quantum computing, we do see the timelines accelerate, and everybody has a different name label at this point, from quantum advantage to quantum utility or useful quantum. We see those timelines accelerating, where 12 to 18 months ago, you had barely a small handful of quantum computing vendors that could make credible claims to execute on that. We now have at least a dozen, including the company that you work with, who are making tremendous progress on that front. So just the sheer volume of technology, products, and teams that have credible solutions and are entering the commercial era of quantum has grown tremendously.
At the same time, back to my comment from five minutes ago, I think everybody is still figuring it out. We’ve probably figured out how to make qubits and hundreds of them. We haven’t figured out how to make many thousands of them yet or even gates. But we have figured out a lot of the engineering and product aspects. However, people are still figuring out a lot of other things. Who is the buyer? Why would the buyer actually buy it? What is the pricing for it? What’s the real value proposition at a tangible level? That whole discourse has shifted dramatically away from, “Here’s my qubit, and look how amazing it is,” to, “What can we actually do with my qubit and how do we bring it to market?” And of course, this whole conversation about other applications, such as sensing, quantum cryptography, and more, has picked up tremendous speed.
I also think that the international quantum technology scene is getting a lot more credit. It has been a lot about the US and Canada in the first four years of my experience in quantum, but now we see more noise from the UK, France, Germany, Switzerland, Austria, Finland, Israel, Australia, Japan, and other regions. These regions are putting forward ambitious projects and creating competitive ecosystems.
This summer, I was asked about it by one of our clients earlier today. It’s been fairly quiet. A couple of questions on our minds are when and how will we see spin qubits emerge in quantum computing? There’s a lot of hype and expectation around that. There is also speculation around annealers, solvers, and optimizers potentially losing ground and market share to companies like QuEra and others that are delivering increasingly impressive quantum computational power, not just solvers or annealers. This shift represents a tidal change in the industry that we might start to see emerge.
Yuval: I want to ask you about money in two parts. One, where is the money in quantum computing? Some say there’s only one buyer these days and it’s the government or governments. And the second is what trends do you see in venture investing in quantum?
André: The money in quantum is, from my perspective, still non-existent. We all know the survey in 2022 that put the overall space at $750 million, and much of that was government funding. Even if we assume that doubles this year (which I doubt), it is still a tiny market. It’s not even what Amazon makes in a day in terms of profit. So, there is no significant money in quantum yet. When trying to discern where the money is, of course, federal contracts are a factor, but there are a couple of emerging trends.
Surprisingly, we see more on-premise models in quantum computing emerging. This trend is driven by companies like IBM, Microsoft (Azure), and AWS seeking to become cloud providers of quantum computing. Where we’ve seen money recently is in high-performance computing centers and data centers on-premise. We have examples like INQ in Switzerland with QuantumBasil securing $24 million. Consulting is another area where we see money flowing. Some big consulting firms are making more money in quantum than one might expect.
There’s also money in the cloud space, particularly with big cloud providers. While the revenue structure is different, the cloud credit pricing structure can add up quickly, making it a significant business. So, we are seeing different revenue streams emerging, but it’s important to note that this is all still from a very low base.
On the investment side, there’s been a scarcity of early-stage and seed money. Most of the investment rounds have been at later stages, with B, C, and D rounds dominating. We haven’t seen many early-stage and seed deals. Moreover, most of the investment money hasn’t gone to US startups. European and Asian startups have received more investment. The trends are still hard to call, as we had about $2.3 to $2.4 billion in venture capital invested in quantum technologies globally last year. This year might see a bit more, but it won’t be a massive increase. The investment landscape is evolving, and investors are looking for more solid roadmaps, financial projections, and proof of concepts from startups.
Yuval: And lastly, in a hypothetical scenario, if you could have dinner with one of the quantum greats, dead or alive, who would that be?
André: I don’t think you and I have had dinner yet. We’ve had drinks, but not dinner.
Yuval: I’m not a quantum great.
André: Oh, come on. That’s a good question. I’m not sure if I’m able to put a name on it, but I would love to have dinner with a scientist or researcher. While I represent GQI, a professional services company, when discussing quantum over a drink, you can sometimes dream about the future. Quantum is a crazy thing. I’ll give you an answer: Eleanor Rieffel from NASA. I moderated a panel with her and three industry CEOs a few months ago. My closing question to them was, “Where do you see Quantum going, and what is your biggest bet?” The CEOs shared their roadmaps and projections. Then Eleanor from NASA, who has been working in quantum for 45 years, responded. She mentioned that their roadmap goes 50 years out and includes ideas like teleportation and time travel, although she clarified that those are still theoretical and aspirational. But people like her are thinking about these topics, and that would make for a fascinating dinner conversation.
Yuval: Wonderful. André, thank you so much for joining me today.
André: It was a pleasure to be with you. And I’ll see you at the next conference.