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[Phil Merchant]
Hello everyone. Welcome and thank you for joining us for this next interview on Dead Cat Live Cat. Dead Cat Live Cat is an online quantum computing magazine founded by law firms BLG in Canada, Marks & Clerk in the UK, and Zuber, Lawler in the US. We’re attorneys but also scientists, engineers, and futurists, focused on the likelihood that quantum computing coupled with AI is going to fundamentally change our world within two decades. I’m Phil Merchant, principal at Marks & Clerk. Marks & Clerk have a large team of patent attorneys tracking earnings at commercial lawyers and litigators, who help thousands of businesses all over the world enforce and protect the Maximizer by their IP. Today, we are lucky enough to have Vishal Shete, Managing Director of Terra Quantum. I was fortunate enough to hear you speak at the world’s top 50 innovators conference in London. It was absolutely fascinating to hear you talk about all the work Terra Quantum is doing to not only implement but also commercialize quantum solutions. So, I’m super excited to discuss your work and your perspective on the industry in more detail. Thank you so much for taking the time to meet with us.
[Vishal Shete]
Thank you, Phil. It’s a pleasure to be here. And yeah, excited for the discussion. And thank you for the kind words.
[Phil Merchant]
Yeah, thanks very much. So let’s just kick us off. I think if you could tell us a little bit about yourself and your role at Terra Quantum in the UK and even who Terra Quantum in the UK and what you do.
[Vishal Shete]
Sure, sure. So I’m, as you kind of stated at the start, managing director at Terra Quantum UK, which means intercom UK as part of the Terra Quantum group, which is Terra Quantum AG. So my role within the group is essentially to look at commercializing quantum technologies. So basically, to look at everything that comes out of R&D, understand kind of the IP that’s being created and see how that can be applied to real-world problems across industries. So it’s been quite a journey into quantum. I was the first person to join the group outside of the R&D space. So we started working about nearly four years ago with Terra Quantum. And since then, it’s been quite a journey of growth. So we’ve got about 250 people globally. London, and TerraForm UK is one of the biggest offices within that, but we have people based in Munich, which is one of our other big hubs, as well as our headquarters in St. Gallen, Switzerland. Terra Quantum is an end-to-end solution provider for quantum technologies. So we have work that we do in algorithms, compute, and security. In that context, you know, the most commercially active side of what we do is in the algorithms space. And in particular, we look to develop algorithms that can work for the compute platforms that we have available today. They can map onto native quantum computers, large-scale faults are one of the beauties as well. But also, we’ve got work in compute, where we do a lot of early-stage R&D in high-temperature superconductivity, negative capacitance, and sort of new areas, which we think could be really exciting new concepts, which could help revolutionize not just the growth of quantum computing, but also existing computing technologies. In the security business, we look at essentially how we can protect against the threat of quantum computing. We’ve got different solutions around quantum key distribution, where our unique position allows us to do quantum key distribution at large distances, and so on. But just a bit about myself. Before joining Terra Quantum, I was born in India, grew up in Singapore, and Australia. I trained as a computer engineer and had a career in financial services, particularly Financial Services Technology, where I was looking at developing new trading algorithms and things in the early part of my career. Then, I went on to do a bunch of other things, including setting up an investment fund. But about seven years ago, I was working as a management consultant, looking at how disruptive technologies can impact the world. I was assigned to a project by Fujitsu at the time to do a project on quantum technology. They came to us at the time and said, “We’ve got this thing coming out of Japan, which is out of the R&D Labs, which is the quantum-inspired digital annealer. They say it’s really exciting, and it’s something that’s going to be revolutionary, but we don’t really understand what it is or how it can be impacted or how we commercialize it. Can you help us with that?” That was an incredible entry into this space. So, we went through a journey of commercializing that, which has been quite successful and exciting. Then, we did similar projects with the likes of Microsoft, around Azure Quantum Work, and several others. They set up a business unit in that consulting firm to look at that. Then, I thought, “This is great being an advisor on the outside, but I think it’d be even better to be fully integrated into something.” Terra Quantum was emerging; I saw the IP that they’ve got in-house, and I thought, “This is the place to be.” It’s been quite a journey since then.
[Phil Merchant]
That’s great. I mean, particularly the financial background that must set you quite well, to fully appreciate the commercialization prospects of the quantum space, particularly the quantum optimization, what can we learn from your role in a product or services that really helped you understand the promise of the quantum application?
[Vishal Shete]
In financial services, I think, as you rightly pointed out, it’s probably the industry where the biggest value can be created. McKinsey has an estimate of about a trillion dollars in value to be created in financial services alone by I think 2030, or 2035, or something like that. So it’s enormous value creation potential in the space. In terms of what I’ve learned from my time in financial services, I’d kind of like to acknowledge one of my, let’s say, unofficial mentors or heroes in this space, Jim Simons. There’s a very famous book, which for those interested in technology and finance, I definitely urge reading, it’s called “The Man Who Solved the Market.” That book talks about how this person and this firm, Renaissance, and their Medallion Fund basically brought together the best minds in maths and physics, got them to look at the challenge of markets, looking at data, not necessarily going deep into the fundamentals of the data, but looking at it as a data problem. This group has been able to create this enormous investment engine called Renaissance Technologies, which the Medallion Fund has been the most successful investment vehicle of all time. Since the 90s, they’ve had an annual return before fees of about 66%, which is tremendous. I got a lot of inspiration from that in the sense that Jim Simons and this group have been able to look at pure maths and physics and apply that, use concepts from across domains, and apply that to financial markets and create that much value. The next iteration of computing technology is quantum computing. The opportunity to apply quantum computing in finance is enormous. So, I’m super excited about doing that.
[Phil Merchant]
Absolutely, yeah. I think that sort of seminar sets you up for McKinsey. The optimization in these bond projections, market predictions, and collateral allocations, as another example, will really pique the interest of people who deal with billions, if not trillions of dollars over the years. Even the smallest improvement in optimization is of immense financial value. From my understanding, the interest from impact researchers is on the accuracy of answers and the speed of getting those answers. So, a quantum computer can get to a solution much quicker for certain problem sizes compared to a classical computer. It can also get a better solution than in the past. Which of those, or both, is the focus for Terra Quantum at the moment?
[Vishal Shete]
It’s a very interesting point you raised about speed versus accuracy. A lot of people, when they learn about quantum computing for the first time, instinctively think about high-frequency trading. They view it simplistically as a faster computer solving problems faster, thus gaining a clear advantage. But that’s not really the case. Quantum computing is good at solving complex problems faster, but not necessarily good at solving simple problems faster. There are challenges with data loading and other factors. The speed advantage is more relevant in complex problem domains where a lot of computation is required. In financial services, the biggest advantage can be in Monte Carlo simulations. The most computationally intensive process in finance is the Monte Carlo simulation, which takes overnight runs for robust risk assessments. If you can do that faster, you can get near real-time risk understanding and better portfolio insights. Terra Quantum is developing an engine using Tensor Networks, which we see replacing or enhancing Monte Carlo simulations in financial services, banking, markets, and insurance. Tensor Networks allow us to execute these applications on today’s CPUs and GPUs, mapping onto quantum processing units for future performance speedup. In financial services, simulation and risk are the highest value spaces, while optimization and machine learning also hold potential, though sometimes challenged by data availability in complex banks. In optimization and machine learning, it’s more about improving accuracy, so the value is created through better answers and predictions with less data.
[Phil Merchant]
That’s excellent. It’s really interesting to hear you’re already applying these solutions and seeing a speedup based on existing computing platforms. Are you using classical computing, virtual quantum processing units, or in-house licensed qubit assemblies? What’s your practical implementation?
[Vishal Shete]
The practical implementation is in today’s compute infrastructure, so it doesn’t need to be virtual GPUs or CPUs, particularly for options pricing or derivative pricing simulations. We use the existing CPU and GPU infrastructure that institutions already have. We have a partnership with Nvidia to execute a lot on GPUs. The advantages come from the software paradigm of Tensor Networks, which describe quantum mechanics and can map onto quantum circuits.
[Phil Merchant]
That leads me to another question about Terra Quantum’s work. Is there any particular project you’re working on right now that you’re really excited about and can share more details about?
[Vishal Shete]
Yes, I’ve talked a lot about financial services applications, like derivative pricing and risk simulations. We’re working with several large European investment banks and asset managers. Outside of finance, an exciting project is molecular simulation, a great problem for quantum computing and important for the life sciences industry. We’re working on a project that can determine the structure of a protein based on semi-empirical calculations without needing training data. This is powerful for biotechnology and pharmaceutical drug discovery because it helps understand protein structures and how different molecules fit together, aiding in drug design and selection.
[Phil Merchant]
It’s interesting that you mentioned DeepMind and AI solutions providing the first iteration, combined with quantum solutions. Do you see AI integration with quantum playing a big role in your project and long-term commercialization strategy?
[Vishal Shete]
In this particular project, it’s more about working in parallel with other technologies. However, quantum AI and quantum machine learning are highly exciting fields for us. Quantum machine learning offers much better and more efficient processing of complex information, leading to better learning capacity and prediction accuracy. We address limitations with hybrid quantum machine learning, integrating conventional and quantum neural networks to improve performance. As hardware improves, we can have a larger percentage of the system running on quantum circuits.
[Phil Merchant]
I’m assuming you’ve got plans to scale this up as more logical qubits become available on different platforms?
[Vishal Shete]
Absolutely. As the underlying hardware improves, a larger portion of the system will run on quantum circuits, enhancing performance.
[Phil Merchant]
Looking into the future, how soon do you anticipate reaching critical mass for a fully quantum neural network?
[Vishal Shete]
It’s hard to say precisely, but within the next three to five years, we might have a “ChatGPT moment” for quantum technologies. Progress is happening on both hardware and software fronts. We may not have a single defining moment but rather a gradual progression. The killer application will drive attention and shift focus towards quantum technologies.
[Phil Merchant]
Once there’s a commercializable use, the platform could take off and have a transformative impact. What fundamental changes to society and technology do you foresee, especially in the UK?
[Vishal Shete]
Quantum computing has broad-ranging applications across various industries. In life sciences, it can revolutionize drug discovery and understanding biology. In addressing existential challenges like climate change, it can improve renewable energy predictions and develop new materials for more efficient transportation. Our focus areas include energy, life sciences, financial services, and aerospace.
[Phil Merchant]
It’s interesting you found your niche in such a wide range of services. How do you stay competitive in this growing marketplace?
[Vishal Shete]
We have a strong R&D team working on algorithms, compute, and security, cross-pollinating ideas across these areas. Staying close to industry and understanding complex problems is crucial. Collaborating with domain experts helps us enhance and improve existing solutions, giving us a competitive edge.
[Phil Merchant]
Collaboration with industry works both ways. How do you educate and inform customers about practical quantum solutions?
[Vishal Shete]
It’s a combination of understanding suitable problems for quantum solutions, showcasing value creation, and working with consulting partners to drive transformation. We also focus on making quantum technologies accessible through platforms and low-code/no-code solutions, educating specialists on the power of quantum technologies.
[Phil Merchant]
Is there an appetite for customers to understand the intricacies of quantum solutions, or is it more about providing a black-box solution?
[Vishal Shete]
It’s a combination. While some may use the platform and develop applications, others, especially in regulated industries like financial services, need to understand the underlying mechanisms for regulatory compliance. Transparency and control are important in such cases.
[Phil Merchant]
That makes sense. How do you approach explaining complex quantum concepts to non-experts?
[Vishal Shete]
We use analogies and practical applications to make concepts more digestible. Like mobile phones, not everyone needs to understand the circuitry, but they need to know how to use the device. Providing accessible tools and showcasing value creation is key.
[Phil Merchant]
What are some common misconceptions about quantum computing you encounter?
[Vishal Shete]
One common misconception is that quantum computing will speed up everything. It’s more about solving complex problems faster. In quantum security, there’s a misconception that it’s a future problem, but it’s a pressing issue today. Post-quantum cryptography is not a guaranteed solution; quantum key distribution is the gold standard for secure communication.
[Phil Merchant]
It’s great to discuss security. Can you elaborate on Terra Quantum’s work in this field?
[Vishal Shete]
We offer a PTC library and work on quantum key distribution (QKD) using coherent states and line loss control. Our method allows using existing optical amplifier technology and infrastructure, achieving performance over 1700 kilometers, recently recognized as a world record. We work with corporates and governments to implement these security protocols.
[Phil Merchant]
That’s impressive. Congratulations on the distance record. Do you see applications for free space communication, like satellite communication?
[Vishal Shete]
We’re currently more focused on fiber optic QKD.
[Phil Merchant]
Regarding regulation, how do you advise regulators to balance safety and innovation?
[Vishal Shete]
Regulators have a challenging job. It’s important to encourage innovation while ensuring safety and trust. Taking a softly-softly approach with guidelines rather than strict regulations is crucial. Focus on applications rather than the technology itself to avoid stifling innovation.
[Phil Merchant]
Each industry should regulate its activities, with government oversight where necessary. For example, quantum security requires higher standards due to the potential risks. However, generally, waiting to see how the industry evolves and then regulating applications is advisable.
[Vishal Shete]
Thank you for the insight. It’s a delicate balance, but ensuring innovation is not stifled is key.
[Phil Merchant]
It’s been wonderful chatting with you, Vishal. Thank you for your time. What’s the most exciting aspect of your job at Terra Quantum?
[Vishal Shete]
Two things: working with incredibly smart people and tackling complex problems across industries. It’s motivational and rewarding to see how we can enhance solutions and create value.
[Phil Merchant]
I look forward to hearing more about Terra Quantum’s progress and innovations. Thank you again, and I hope to catch up with you at the next conference.
[Vishal Shete]
Thank you, Phil. Exciting times ahead. Enjoyed our chat today. Thank you. Cheers.
