Quantum Matters

This is an abbreviated version of my opening remarks to The City Quantum and AI Summit, which took place at the Mansion House on October 11. A recording of the event is available here. 

Thank you to all who have come in person – and virtually, from India to Bulgaria to Nigeria – for joining The City Quantum and AI Summit. And thank you above all to our sponsors, who allow this Summit to be free, so all students can join, and Diversity & Inclusion can be central to it.

We are celebrating the summit in the Mansion House, the palatial home of the Lord Mayor of the City of London, to bring together the financial and quantum sectors and thus leverage the heady advances we have seen in quantum over the last year.

However, quantum has limits. As you will all be aware, we in the UK have had a few issues with recent government announcements and policy, a plummeting pound, mortgage withdrawals, borrowing cost rises. In fact, Chancellor Kwasi Kwarteng rang me this morning. Karina, he said. Can a quantum computer solve these issues?

Sadly, not yet. But what can quantum do? It can help deal with a world of increasing complexity, geopolitical divisions, and environmental harm.  

We don’t have a state of the art quantum computer today. But what we do have is different versions of a basic quantum computer – with a raft of improvements being announced every day – and advances in quantum software. That software can often be used on classical computers. Not just quantum ones. And participants should not let the perfect be the enemy of the good. 

I won’t anticipate the panel discussions, but we are seeing developments in at least three areas of interest.

+the formation of new medicines, where you can create a ‘digital twin’ of a human body to conduct virtual drug trials.

+supply chain issues. A boring topic, till the pandemic and Ukraine brought it all home. For instance, optimising a supply chain, so that cargo ships are fully filled with the right containers and don’t sit around the Port of LA for weeks on end. Not sexy, but with an incredible effect on the bottom line of the companies involved, and on the carbon footprint of humankind. 

+Finance. Given the roller coaster of all markets, who wouldn’t want to de-risk portfolios, price options infinitely better, hedge forex risk properly…

Why are we here? The City, and the quantum sector together, can create the economic growth that governments in the UK, the US, and Europe, and other countries, are looking for. How?

Communication, collaboration, immigration.

Communication.

The quantum sector needs to communicate better with the financial sector, and the wider world. The City Quantum and AI Summit is one of the foundations of that. 

Collaboration.

The more we do together, the better for quantum, the better for the financial and professional services industry. And the more transnational that is, the better. I note the UK and the US Technology Partnership, announced last year, and which will hopefully include other countries, was just updated last week. In the words of Jay Lowell of Boeing: “The economy of ideas does not follow geopolitical borders.”

Immigration.

We need to get real on this. We – and I mean ALL the industries represented here, don’t just need quantum PhDs, we need marketing people, we need HR, we need PR. In the FT yesterday, President Obama’s Chair of the US Council of Economic Advisers, Jason Furman, noted that immigration is so much more important than any other measure to increase productivity. 

Communication, Collaboration, Immigration. 

In the last three weeks, we’ve seen the Nobel Prize for Physics given to three pioneers of the quantum industry.

We’ve seen the European Commission announce six sites where quantum computers will be located in the EU.

We’ve seen the creation of UKQuantum, a consortium to accelerate UK innovation. 

That is just three announcements in the sector. Even more important is the increase in defence budgets on the back of our uncertain world. Money matters. As we saw from the Apollo Space Mission, defence spending can be a propulsor of amazing innovation for civilian use. In fact, space missions brought us CAT scans, water purification systems, and even Baby Formula! 

There is, as The Quantum Insider puts it, a fundamental discrepancy between the rapid advances in quantum technology and the adoption by commercial customers. But today, you are going to here from those who are adopting it. Those like Bosch, Standard Chartered, and Boeing, who are going to have a quantum advantage in competing in our disrupted world.  

US General Eric Shinseki had a great phrase: “If you don’t like change, you’re going to like irrelevance even less.”

Let’s get on with being relevant. Thank you.

Karina Robinson is the Founder of The City Quantum and AI Summit and a Senior Advisor to Multiverse Computing

Neutrality is not an option

How quantum benefits from geopolitical fissures

“Neutrality is not an option,” said the top NATO executive. Speaking at a private dinner a week ago, his words applied to the business world, not just to nation states.

The question is, how aware are Boards of the binary choices they are facing, and what does this mean for the quantum sector?

Geopolitical risk galloped back onto Board agendas over the last few years with Brexit, the economic consequences of former President Trump’s economic nationalism, and President Xi’s ‘fortress China’ policy. Events this year only added to its importance: Russia’s invasion of Ukraine, which today morphed into a possible war on the West, China’s stepped-up aggression towards Taiwan, and the volte-face of neutral Sweden joining NATO.

Western tech companies that fundraising are turning away approaches from Tencent and Alibaba, the Chinese technology behemoths, who they would have welcomed with open arms only a few years ago. The US and Europe, among others, are encouraging ‘onshoring’ or ‘friendly shoring’, the return of manufacturing to the domestic market, or at least to countries that are seen as friendly. Supply chain resilience is now a central issue for business and governments – note the billion-dollar subsidies for domestic semiconductor manufacturing in President Biden’s CHIPS and Science Act 2022.

But the full implications of Russia’s invasion of Ukraine and China/US tensions over Taiwan have yet to be digested by business leaders attached to globalisation and, above all, attached to the profit-making possibilities of a vast Chinese middle class – 400m people, larger than the US population. In his recently published diaries, Lord Patten, the last Governor of Hong Kong before its return to China, wrote that Canadian governments from 1995 onwards had a “crush” on the country. “They see – here we go again – treasures beyond human craving just over the horizon.” His words are widely applicable today not just to nations, but companies as well’.

A few months ago, the CEO of a FTSE-100 asset management firm agreed at a private lunch that the geopolitical divide between the West and China had widened markedly. But the firm, he said, was not dialling down its exposure to the country. Its operations there were both profitable and a great source of data, he added.

Within the next seven years an invasion of Taiwan, or at the very least a blockade, is looking more likely, say experts. There are parallels between President Xi and President Putin. In the words of former head of MI6 Sir Alex Younger, referring to Russia’s invasion of Ukraine, the ageing Russian leader had gone into “legacy mode, almost messianic in his determination to be the president that restored Russia to greatness.”* The same could well apply to Xi.

Putin’s invasion led to a set of unparalleled sanctions which hurt Western and other allied companies doing business in Russia as they struggled to depart the country, selling their assets at knock-down prices, while it also had a deleterious effect on many economies through higher energy and food prices.

However, the escalation of Taiwan tensions into something resembling a war will make this year’s issues seem paltry by comparison, given China’s integration into the world economy.

Yet for the world of quantum, a world of opportunity beckons – albeit not in China. At a time where private sector funding for Deep Tech is looking sparse, newly-emboldened governments and security alliances are stepping in.

Not only is there the CHIPS and Science Act 2022 in the US, but only a few months ago NATO launched a €1 billion Innovation Fund for early-stage start-ups and venture capital funds developing dual-use emerging technologies in areas including quantum-enabled technologies, novel materials, energy and AI. Germany stated last week that it would become Europe’s leading military power with, according to German Chancellor Olaf Scholz, “the best-equipped force in Europe.”

In parallel with the development of quantum technologies in areas like energy and novel materials, the largest opportunity exists in cybersecurity. This encompasses protection against a functional quantum computer that can break current classical encryption – expected within the next 5-7 years – and better protection against current break-ins, which include the ‘harvest now, decrypt later’ strategy.

As China evolves into a declared enemy, its efficient cyberespionage programme is becoming ever more newsworthy. The FBI opens a new investigation into Chinese espionage every 12 hours, it has stated, while MI5’s caseload has risen sevenfold since 2018, according to the British spy agency.

One US estimate suggested that Chinese commercial espionage stole as much as $600bn of US intellectual property every year. The EU has estimated that total IP theft costs it €50bn in sales every year, with the loss of 671,000 jobs.

From Post-Quantum Cryptography (PQC) to Quantum Key Distribution (QKD), firms in the quantum space are developing a mix of technologies to combat this by securing communications and keeping data safe.

The National Security Agency (NSA) put a shot across the bows of systemically important companies earlier in September when it released future quantum resistant algorithm requirements for national security systems. In fact, actual post-quantum software defences are still being elaborated, and the National Institute of Standards and Technology (NIST) has not yet published the final list of those it considers viable – we are only at the short list stage. But the NSA was intent on warning corporates that major investment in new cyber security systems are on the horizon.

To be sure, funding for quantum start-ups has not totally dried up. $2.2 billion went into the sector over the last 12 months, up 15.0% on the previous year, according to quantum market data from The Quantum Insider. However, much larger amounts are likely to be coming from governments and corporates as they adjust to deepened fissures in the geopolitical strata.

*Quote from Michael Smith’s fascinating book The Real Special Relationship – The True Story of how the British and UK Secret Services work together