Investing in Deep Tech
Quantum Leap: Five Industries Ripe for Quantum Disruption
Deep tech pursues the hardest, most revolutionary technology. These developments can provide tremendous social benefits and also be highly lucrative. A prime example of deep tech is quantum computing — both for its level of difficulty and promise.
This profound evolution in computing is rapidly becoming the breeding ground for startups promising to disrupt multiple industries. Like other venture capitalists, Alumni Ventures is exploring and backing some of these startups, with selected deals going into our Deep Tech Fund.
To illustrate the promise of quantum computing, we’ll explore just five of the sectors where the technology can make an impact, along with examples of startups in those sectors that Alumni Ventures has invested in.
And, if you want to learn more, watch this webinar where we interviewed a top expert in the world of quantum computing, Xanadu CEO Christian Weedbrook, and learn more about Xanadu in this video below.
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Breaking Barriers: Xanadu’s Quest for Quantum Supremacy
Xanadu, an Alumni Ventures portfolio company, stands at the forefront of quantum computing, a technology poised to revolutionize high-performance computing. Quantum computing offers the promise of solving computational problems of unprecedented size and complexity, previously deemed unattainable. As Xanadu continues to push the boundaries of quantum computing, it emerges as a beacon of innovation, poised to reshape industries and unlock new frontiers in computational capabilities.
What Is Quantum Computing?
Quantum computers have been touted to be as revolutionary in the 2020s as smartphones were in the 2010s. Compared to traditional “classical” computers that store information in ones and zeros, quantum computers are not limited by the binary nature of current data processing. Therefore, they can provide exponentially more computing power while using a very small fraction of energy and time. This capability has the potential to revolutionize drug discovery, cybersecurity, climate tech, finance, and more, leading BCG to estimate that quantum computing can create value between $450 billion to $850 billion while solving some of the biggest challenges on Earth.
As the field matures, the next decade may witness quantum milestones such as better error correction, the advent of post-quantum cryptography, and the potential demonstration of a quantum advantage. The latter will be a sea change, marking the point where quantum devices outperform classical computers across applications, creating billions in value and transforming modern computing.
IMPACTED SECTORS
Drug Discovery
Quantum computing promises to accelerate the pace at which we discover new drugs and personalize treatments. By simulating molecular interactions at an atomic level, quantum algorithms can design drugs more efficiently than traditional methods. This reduces both the time and cost of bringing medications to market. One example of a startup innovating in this area is Classiq. That company’s drug discovery work focuses on the potential of quantum computers to significantly reduce the chemical space that needs to be considered when searching for new drugs, from billions to hundreds of molecules. This reduction is crucial for helping speed new drugs to market, especially to meet urgent needs such as pandemic responses. The computational chemistry calculations enabled by these quantum computers can help identify safer and more effective medicines.
Battery Technology
One promising avenue for cleaner energy is advanced battery technology. Quantum computing can solve complex chemical problems, paving the way for the next generation of high-capacity, fast-charging, and environmentally friendly batteries.
Xanadu, in partnership with the Volkswagen Group, has launched a research program to optimize the computing power of quantum algorithms for battery materials simulation. The company aims to reduce computational costs and expedite the development of safer, lighter, and more cost-effective batteries.
Additionally, Xanadu’s partnership with the Korea Institute of Science and Technology focuses on developing quantum algorithms for next-generation lithium-ion batteries.
Data Privacy and Security
Quantum startups can help ensure that our personal and financial data are protected against even the most sophisticated cyberthreats.
Quantum is at the forefront of creating unbreakable encryption methods, such as quantum key distribution, a method that utilizes the principles of quantum mechanics to create a secure communication channel. It allows two parties to produce a shared random secret key, known only to them, which can then be used to encrypt and decrypt messages.
Zapata has obtained two patents for post-quantum cybersecurity techniques. The first technique, Variational Quantum Factoring (VQF), is a smart approach designed for emerging quantum computers that helps identify weaknesses in digital security before they can be exploited. The second technique, Quantum-Assisted Defense Against Adversarial AI (QDAI), combines traditional and quantum computing to strengthen machine learning systems against sophisticated cyberthreats.
AI and Machine Learning
AI and machine learning are already redefining what machines can do. Quantum computing takes this further by dramatically increasing the speed and accuracy of data analysis, enabling AI to solve complex problems — from climate modeling to autonomous vehicle navigation — faster than ever before.
Rigetti Computing has developed solutions to weather modeling problems using quantum computers, integrating quantum machine learning techniques with classical models to enhance storm prediction capabilities. Their work demonstrates practical applications for near-term quantum hardware and suggests that quantum computing methods can be integrated into everyday machine learning tasks.
Materials Science
Quantum computing holds the key to discovering new materials with tailored properties, which could revolutionize everything from semiconductors to construction.
Imagine materials lighter than air but stronger than steel, or coatings that make objects invisible. This isn’t science fiction; it’s the future that quantum startups are actively working to deliver.
Q-CTRL focuses on solving problems with greater accuracy in industrial chemistry, which is closely related to materials science. They provide AI-enhanced quantum infrastructure software products that stabilize quantum hardware and serve various industries including materials science. Their efforts are aimed at reducing errors in algorithms by significant margins.
More on the Quantum Transformation: Watch Our Webinar
Interested in learning more about quantum computing and its transformational potential? Watch our on-demand webinar, where we discussed the quantum landscape, our investment thesis, and how we identify startups with the potential to disrupt industries.