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Quantum Computing Inc: DEEP DIVE
OVERVIEW

Quantum plots course to meet demands of future

Its team of computer scientists designs algorithms that will be used by high-frequency traders, scientists doing genetic research and pharmaceutical companies
computing symbols in cyberspace
OVERVIEW: QUBT The Big Picture
Quantum has assembled a team of experts in mathematics, quantum physics, supercomputing, financing and cryptography

Consider the possibilities. Quantum computing holds the promise of performing complex calculations in seconds that would take the most advanced computers years to complete.

In market terms, an investment in quantum computing today is analogous to a sage and prescient bet on Microsoft (NASDAQ:MSFT) or Amazon.com (NASDAQ:AMZN) 20 years ago.

“We’re at the same stage in quantum computing today,” says Robert Liscouski, the chief executive officer of Quantum Computing Inc (OTCMKTS:QUBT), a start-up based in Leesburg, Virginia.

“People generally understand what quantum computing can do, but they don’t understand what it’s really going to do.”

Seismic changes in computing expected

This new breed of supercomputer promises to dramatically improve computing power by storing information not in bits but in subatomic particles called quantum bits or qubits which have mighty capabilities.

Using qubits in so-called superpositions, a quantum computer can find answers to computational challenges in far fewer steps than a traditional computer would require.

Set up at the beginning of last year, Quantum, which trades on OTC Markets under the ticker QUBT, bills itself as the first publicly-traded pure-play quantum computing company.

Its team of computer scientists designs the next wave of algorithms used by high-frequency traders at hedge funds to scour the market for arbitrage opportunities and competitive investment strategies. But their programs are also set to be used for genetic research, and by pharmaceutical companies and governments.

“What we’re doing is writing the algorithms that will run on quantum computers to solve some of the hard problems that quantum computers can solve based upon their ability to scale very complex problems very quickly,” says Liscouski, who was appointed by President George W. Bush to serve as the first assistant secretary for infrastructure protection at the Department of Homeland Security.

“We’ve got a great team, scale and a solid financial base and we know the art of the possible based upon experience and I think it’s an exciting time for investors to understand what they can do in terms of the future.”

Experts in mathematics and supercomputing on board

Quantum has assembled a team of experts in mathematics, quantum physics, supercomputing, financing and cryptography. That team includes technical experts like quantitative data scientist Sergey Shuster, an applied quantitative mathematician who has spent years developing derivatives-pricing and credit risk models and won Russia’s Mathematical Olympiad.

On top of his years in security work while at the Department of Homeland Security, Liscouski is the former president and CEO of Implant Sciences, which ran an explosive trace detection business, and was sold for $118 million.

“We’re creating software that will be used on a quantum computer that ultimately will solve very very big problems,” he says.

The potential worldwide market for quantum computing is projected to be in excess of $10 billion by 2024, according to Morgan Stanley research.

At the core of Quantum’s advances is its development of a quantum annealer, a simulator that mimics quantum computing and functions at speeds of up to 12 qubits.

“We’re creating a quantum development environment that allows us to do the simulation we need as we’re doing the development,” explains Liscouski. “Applications powered by our annealer will initially focus on producing algorithms that solve trading problems.

Algorithms for Wall Street trading programs under development

Indeed, researchers at Quantum are focusing on the financial algorithms required to make trading programs for hedge funds and other investment firms reliant on high-frequency trading. This area represents a $1 billion market opportunity by the company’s estimates.

“That speed is what is going to make the difference for hedge funds to make money versus someone who is not using a quantum computer,” says Liscouski. “The speed of those calculations is going to give them the practical edge that they need to be able to make the appropriate trades and investments to give them a financial edge.”

“We’re very focused right now on the fintech space. We expect to be rolling out other algorithms over the next year or so, but our first goal is to do the fintech algorithms,” he added.

A second area that throws up sizeable commercial potential for Quantum’s computer scientists is artificial Intelligence. The possibilities for the use of quantum software applications here extend from improving facial recognition technology to handling the in-flight requirements of aircraft.

And Liscouski applauds this year’s introduction of the Artificial Intelligence in Government Act, which seeks to improve the use of artificial Intelligence across the federal government. Quantum Computing aims to one day win government contracts. “We think there’s a big play for us there,” he says.

Code-cracking another focus

Given the threat of cybercrime, encryption security and code-cracking are another hot spot. The company’s commercial-stage quantum cryptography applications are expected to launch in the first quarter of next year. And the company has recruited experts in cryptography, artificial Intelligence and financial technology, to its advisory board, in a bid to assist in the development of its programs.

Quantum Computing is also courting companies involved in genetics that are looking for new gene therapies and different ways to conduct genetic analysis. “We have partners with whom we are currently talking that are genetic resource companies that are interested in taking a quantum computing approach towards genetic analysis,” says Liscouski.

The algorithms that Quantum is writing can be tailored to address particular problems faced by prospective clients. “We may have a number of clients that want the same basic algorithm as a platform, but they can tailor the use of that particular algorithm to their specific need,” says Liscouski.

Revenue ahead

Liscouski expects the pre-profit company to be generating revenue by the end of next year. It’s about a third of the way towards raising its target of $15 million for the runway costs to fund its business.

“We’re having great success in raising the money,” reports Liscouski. “We want to make sure we have enough to get through our operational and development cycle.”

Next year will bring announcements of partnerships with hedge funds and financial institutions as well as the licensing and commercial launch of finance and cryptography applications.

Liscouski describes the algorithms being written now at Quantum as the equivalent of the programs that paved the way for an MS-DOS computer to do more than what the operating system MS Dos could do.

“We’re not looking to be Windows, we’re looking to be Excel or some other complex system that runs on their system,” he says. “You need a baseline system but then you need the applications that are going to be running the business.”

There are many possibilities, including potential interest from some of the larger fish in the technology ecosystem. Google, IBM, Intel, Alibaba, Mitsubishi, Lockheed Martin and Microsoft are all reported to be toiling away on quantum computing research, according to a report from the research house CB Insights.

“Clearly, we’re in a position that as we demonstrate promise, we would be attractive to 'a Google,'” concludes Liscouski. “I’m not suggesting that’s our goal, but that’s clearly how that works.”

Contact Ellen Kelleher at [email protected]

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January 15 2019
Its team of computer scientists designs algorithms that will be used by high-frequency traders, scientists doing genetic research and pharmaceutical companies
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