When will Quantum Computing be ready for prime time? Inside Rigetti’s Big Bet

Dr. Subodh Kulkarni (00:00):
Nature has given us a perfect quantum computer. It's the human brain. What we are trying to do is come close to it with an actual machine. 

Ann Berry (00:07):
Quantum computing is a new way of processing information with the potential to solve problems that classical computers can't. While classical computers use bits that zeros or ones quantum computers use cubits, which can represent aspects of both zero and one at the same time. Thanks to the principle of superposition, this allows quantum computers to explore many possibilities at once. A big leap for use in complex fields like drug discovery, cybersecurity, and logistics. Some experts, including NVIDIA's, CEO, are unsure whether quantum will have a major commercial impact within the next decade. But in terms of the technology breakthroughs are happening largely coming from both big tech. For example, Microsoft recently unveiled the world's first quantum processor powered by topological qubits and from niche players like TI Computing, which makes its own chips and build school stack quantum systems in-house. Recently, Rigetti sold systems to Montana State University in the UK government, and it's aiming to launch a 36 qubit processor by mid 2025 and to across a hundred qubits by year end. 

(01:01)
But is that enough to keep the company competitive? Over the past year, Rigetti stock has sawed over 500% as of filming today, April 8th, but not because of strong financials. Despite a market cap of over two and a half billion dollars, the company made just under $11 million in revenue in 2024 and posted a net operating loss of nearly 69 million burning through cash to support r and d. The good news is that TI has over $200 million in cash as of December, thanks to recent equity offerings, and has struck some interesting strategic partnerships that we are going to get into giving it some time to build out its technology while the path to real revenue remains still maybe years away. So now the question becomes how does a quantum startup like TI stand out next to giants like Microsoft? We spoke with ti, CEO, Dr. Subodh Kulkarni, to find out and to learn more about what kinds of applications are actually possible right now today. Let's get into it. Wow, Sabu, this is such an exciting time for quantum computing, but it's also a slightly anxiety inducing time when we look at what's going on in the global supply chain world. Can you just describe for us, Rigetti supply chain and how at this moment with everything going on in tariffs, you are thinking about managing through it. 

Dr. Subodh Kulkarni (02:11):
Our chips, we do what is called a superconducting gate based quantum computing, where we are still doing chips, but we are using different materials, different processes, superconducting materials, very cold temperatures when we get the superconducting effects to create a quantum effects. So our chips do look and feel different than classical computers. That also means our supply chains look different in classical computers, silicon-based supply chains and all the materials involved with it. There are plenty of studies done on the supply chain. Current issues and challenges going forward in quantum computing, our volumes are relatively small right now since we are still in r and d. So the constraints are not as severe as in classical computing or classical semiconductor industry, yet we are dealing with some exotic materials like superconducting, materials like niobium and tantalum that are not exactly commonplace materials. You can go across the street and buy in a local hardware store. And we also deal with one particular isotope of helium called helium three, which is, again, not commonly available. It's a byproduct of a nuclear fusion industry, which is a by definition. So we rely on the department of energy here in the US to give that supply to us. So we have a few constraints like rare earth elements and Helium three. So we monitor those carefully. But given the current volumes, given the anticipated volumes for the next five to 10 years, we really don't see significant challenges on the supply chain side. Talk 

Ann Berry (03:46):
To us Abood about what quantum computing can actually do today. We'll talk about what it can do in the future and the hype and the hope, but let's talk about what it can really do today. 

Dr. Subodh Kulkarni (03:57):
So it gets into the heart of what is quantum computing, and fundamentally, a quantum computer is different than a classical computer. We are dealing with qubits instead of bits in the classical world, and we deal entanglement of qubits as opposed to bits that are completely isolated in the classical world. So in the classical world, when you have N bits, your computation power goes linearly up to multiplied by N because it's zero and one for each bit, and your bits are completely isolated from each other. In fact, we go out of our way to make sure the bits are isolated from each other. In the semiconductor world, in quantum computing, our qubits, they can be in multiple states. They're not restricted to zeros and ones, 

(04:40)
But importantly, our qubits talk to each other. They entangle with each other. And what that does allow us is when we have N qubits, instead of the classical world of linear computing power going up by two N, we get two race, two N because of the entanglement effect and the multiple states that we can create. And when n is small, it doesn't make a big difference, five 10 or whatever. But when N is 50 or 102 multiplied by a hundred is 202 race two 100 is practically infinity. And that's where quantum computing really starts showing the benefits. Also on the energy side in classical computing, as you increase your bits, your energy consumption goes up in quantum computing, as you increase your qubits, the energy consumption doesn't go up linearly with the qubits. So we get the benefit of both significantly higher computing power, but also significantly lower energy consumption. 

(05:33)
How do we do that? And that's what I think gets into the heart of your question and where we are. So right now we are making quantum computers. We have deployed them on multiple cloud environments like AWS and Azure. And also we have shipped on-premise quantum computers to customers like the DOE labs or the DOD labs or the UK national lab, and they work. So you can do your standard computing with quantum computers just like classical computers, but really that's not the reason why you're interested in quantum computing. You're interested in it because of the two race to end computing power and the lower energy consumption. And that gets into complex problems like sensorial math that are very difficult to solve. With quantum computing, we can take on problems that need simultaneous computing. Think about problems that have thousands and millions of variables that are all interacting with each other simultaneously, like the weather forecasting problem or drug discovery problem or encryption type problems where you have multiple variables and you have to deal with them simultaneously because they're all interacting with each other. 

(06:37)
Those problems are more amenable for quantum computing. A simple way to think about it is think about how a human brain works. Fundamentally, we have millions of neurons that are all entangled with each other. We get analog input, we process a few neurons, fire up, we get analog output. There is no zeroes once there is no sequential computing happening in our brain. A quantum computer works very similar to a human brain. We have a bunch of qubits that are all entangled. We get analog input that is no digital zeroes once, and we get analog output and our qubits are doing the work. So in some ways, nature has given us a perfect quantum computer. It's the human brain. What we are trying to do is come close to it with an actual machine. 

Ann Berry (07:21):
So when we think about the actual fields, this can be used in right now. Saud, I had a really interesting conversation here actually for one of our sister brands, which is CFO Brew, and we had a conference and I had the privilege of speaking to the former deputy director of the NSA. And the question I asked him was, give me the top things that keep you awake at night. And one of his top three things was quantum computing. Talk to us about that. I got his answer, but let's hear your answer. What is the application of quantum computing and cybersecurity and encryption that we should be thinking about today? 

Dr. Subodh Kulkarni (08:00):
There are many applications for quantum computing. Fundamentally, anything that is probabilistic in nature fits in with the quantum computing world. So we are talking about weather forecasting, financial forecasting, pharmaceutical discoveries and so on. But one of the applications that's getting immense attention and for good reasons is encryption and decryption. Fundamentally, because we are doing simultaneous computing, it becomes a lot easier for quantum computers to factor or find out the prime factors of any number. And that gets into decryption. So right now, a ES encryption works because it would take you thousands of years to break a single, find a single code. However, with quantum computing, because you have the power of simultaneous computing, you can figure out factors relatively easily. We are talking a few seconds, almost half a minute to a minute. That is a huge concern, obviously, because unfortunately that means if a rogue country or a rogue company comes up with a capable quantum computer, they could break into all of our encryption right now, not only find out all the information, but then go and encrypt it to the quantum computer. 

(09:11)
So we lose everything we have today, and the stakes become very high. Obviously, no one wants to be in a position where you are hostage to a rogue company or a rogue country. So that's the reason organizations like NSA and other government organizations that are extremely worried about national security have immense interest in quantum computing. You certainly do not want to fall behind in quantum computing because there's a high chance that a rogue company or a country could use quantum computers for negative use in terms of decrypting breaking codes before we start finding quantum computers being used for positive applications like drug discovery or weather forecasting, those kinds of applications. 

Ann Berry (09:55):
And so let's zoom in then Saud into where a getti is focusing in amongst all of these possible applications. Saw some headlines recently. Barron's had a very interesting headline on you, moving from hype to prototype, being selected for the US Quantum Initiative. Talk to us about that. What does that involve? 

Dr. Subodh Kulkarni (10:16):
So reti is a technology development company focusing on superconducting gate based quantum computing. We are about 145 employees based in Berkeley, California. That's where I am right now. We build our own chip too. So we have a fab in Fremont, California about 30 miles south of where I am. We call ourselves a full stack quantum computing company. So we develop everything from designing the chip to building the chip to the software layers to deploying it on the cloud. We have been around for 11 years, went through series A, B, C, went public in 2022 time period. Right now, we have deployed multiple systems over that time period. Right now, our state-of-the-art system is a 84 qubit system that is available to anyone to use on AWS or Azure. It has what we call the important metric is the two qubit gate fidelity, which is the accuracy if you will, right now, depending on the kind of gates we use, we are between 99.0 to 99.5%, which sounds very good, but it's not good enough. 

(11:24)
That's the big challenge we have, is to improve the fidelity. Our gate speeds are in the 70 nanoseconds range right now. So we still call ourselves very much in the r and d stage right now for an important milestone in our journey. And for that matter, for the entire quantum computing ecosystems journey is what we call quantum advantage. That's when we can demonstrate superiority with quantum computing or classical computing for practical applications. In terms of performance or cost, we believe we are roughly five years away from that point. And to demonstrate that point, we believe we need to be roughly at about a thousand qubits, roughly at about 99.9%, two qubit gate fidelity, roughly at less than 20 nanosecond gate speed. And we need to have what we call real time error correction. So again, the four things we think that are critical to get us to quantum advantage, and we believe we will be there in about five years, are about a thousand qubits or larger, about 99.9% fidelity or better, less than 50 nanosecond gauge speed and real time error correction. We think, and I believe that's consistent with what some other companies like IBM and Google have said. We believe we will be in that technology development area roughly five years from now, and that's when we can start demonstrating superiority for practical applications, whether there are any children purpose computing applications or things that we discussed earlier like pharmaceutical drug discovery or weather forecasting or financial forecasting or encryption, decryption type applications. 

Ann Berry (12:57):
And so in terms of the work that is being done with DARPA and the US Quantum Initiative, is that focused on cybersecurity? Is that focused on some of the other areas you touched upon? 

Dr. Subodh Kulkarni (13:08):
Well, DARPA's mission, and it's an exciting mission and we are really happy to be part of it, is to build what is called as a utility scale quantum computer by 2033. So they want to demonstrate that you can get better value than what you're spending. In other words, we, in the technical world, we also sometimes refer to it as fall tolerant quantum computing. Essentially it means quantum computers that can do anything that you ask it to do in layman's words to enable that. And that's where the timeline is 2030. By 2033, we think you need thousands if not tens of thousands or hundreds of thousands of qubits. So mentally, we have a image of a quantum computer that has roughly half a million qubits or even more qubits at 99.9% fidelity, really fast gate speed with real-time error correction code, and they can do any applications including encryption, decryption type applications. 

(14:05)
And that's really what DARPA's overarching mission is now, right now, they have selected a few companies. We are excited to be part of it. Our focus is to continue to improve our tbit count, continue to improve our fidelity, continue to make our gates faster, and continue to integrate it with real time error correction code. So we have a lot of work to do. That's what we are focused on for the next few years. As I mentioned, we believe we'll get to Quantum Advantage in about five years with a thousand cubits. DARPA is raising the stakes even higher and saying Quantum advantage isn't good enough. We want what is called as a utility scale or fall tolerant quantum computing. So that's the next step, but you have to take the first step, which is to get to quantum advantage before you can think about utility scale quantum computing, which is DARPA's mission. 

Ann Berry (14:50):
Talk to us about your recently announced partnership with Quanta Computer. It's big dollars. Talk to us about the amount of money being invested there and what it is that you hope to achieve from it. 

Dr. Subodh Kulkarni (15:01):
Yeah, we had an exciting announcement with Quanta Computer in Taiwan. It's a very strategic partnership that we announced in this partnership. What we are doing is essentially we are focusing on the critical area, which is the quantum computer, the quantum processing unit itself. That is the design of the chip, the fabrication of the chip and immediate hardware and software that goes around the chip package, if you will. But there's still the rest of the stack that has to be involved in a quantum computer. We still need CPUs, GPUs, FPGAs, several layers of hard other hardware and software. We call it dilution, refrigerator, all the cablings that go with it and so on. And it doesn't make sense for a small company to do the whole thing. Right now, we have been doing it partly because there were not too many players out there who would be capable of doing the rest of the stuff. 

(15:54)
But now that we are getting closer to reality and we are close commercial timelines, we decided it is appropriate to involve somebody who's good at those kinds of essentially commodity type items, but very important commodity type items. And Quantum is a terrific partner. They're a well established, large Taiwanese company with over 43 billion of sales. They are the closest partners for Apple for laptops. They're the closest partner for NV DM for GPU servers. So they're really at the high end of their respective ecosystems. So they have a strategic interest of getting into quantum computing. They did their homework. They found us as one of the leaders in quantum computing. We were looking at how do we scale up from where we are in r and d as we become commercial and the volumes get larger. So it was a good match to partner with Quantum Computer where we bring core quantum computer quantum computing technology, and they bring the rest of their capability, high volume manufacturing, low cost manufacturing, but also GPU expertise, CPU expertise, the rest of the hardware expertise. 

(17:02)
So the agreement is that we still own the ip. They are essentially our contract manufacturer for the hardware stack for that. They are giving us 35 million cash to get about 3 million shares of ours. So they're taking an equity position in the company, but it's a relatively small position. But more importantly, they're committing to investing 250 million over the next five years for the portion that they are involved with. So including their 35 million at the end of last year, we had about $217 million. So we are bringing 250 million of our cash for the next five years. Focusing on the QPU side of the development, they are bringing in 250 million of their cash focused, the non QPU hardware portion. So together what we announced is that we are committing roughly $500 million of investment in this area for the next five years, which is when we think we will be able to get to the Quantum advantage point and make it into a commercially viable enterprise at that point. 

Ann Berry (18:06):
Funding r and d, which I know is expensive for a Getty last year through these kinds of partnerships, Saud, is that the way to survive when competing against big tech when competing against the Microsoft of the world? And do you think that you'll have more such strategic partnerships to strike to be able to compete with the deep CapEx budgets of big tech? 

Dr. Subodh Kulkarni (18:27):
You are absolutely right. I mean, we are competing with big tech, particularly in the superconducting gate based quantum computers that we are developing. We are competing effectively with companies like IBM, Google, Amazon, Microsoft, depending on who you're looking at, the competition is different with Amazon, it's more of a partnership on the AWS side too. Same with Microsoft. We are partnered with them on the Azure side. But yeah, we are competing. But certainly we definitely compete with IBM directly. And there are advantages of being small. I mean, we can move a lot faster because we are smaller and we are more focused. We are purely focused on quantum computing. We don't have a big business to worry about and distractions and so on. So there are some advantages, but at the same time, before we understand that they are build capitalized and in good position to invest $500 million between us and Quanta is not small. 

(19:22)
I mean, it is a large amount of money at the end of the day, if you're talking a hundred million dollars of investment every year, we feel that's a good amount of money for us to take on big tech. But really where it comes down to is technology. Right now. The key differentiation we have with other big tech companies in superconducting gate based development is our open modular approach. We have architecture our system very differently than the way IBM and Google have or others have. Ours is open modular, which allows us to integrate innovative solutions from third parties relatively easily. 

Ann Berry (19:59):
Saud, we are going to wrap with some rapid fire questions. So just three questions to finish off our time together. First question is, which company do you admire the most other than Retti, which is not an allowed answer? 

Dr. Subodh Kulkarni (20:14):
Well, as much as we compete with them right now, I admire IBM as one of the best companies out there when it comes to technology development, partly because I started my career at IBM. So there's still a soft corner there 

Ann Berry (20:27):
Who is one scientist or innovator and they can be dead or alive that you would've loved the opportunity to work with Arogeti, 

Dr. Subodh Kulkarni (20:36):
Given my heavy involvement with quantum computing right now, I have to say it's Richard Feinman. He has done some phenomenal work. He done some phenomenal books. It would be fun. And he sounds like just a fun person to get to know. I wish I had a chance to meet him at some point in my life. 

Ann Berry (20:50):
Oh, we're going to have to broadcast that. Ask out. We'll have to see if we can get him to respond to that. And last question for you, Saud, because you're so immersed in this. What is the one misconception people have about quantum computing? 

Dr. Subodh Kulkarni (21:04):
People still think of quantum computing as something that is, they're skeptical and they believe that it may not happen. I'm there to tell them that it's going to happen. It's just a question of when, not if. And the best I can say is it's in five years, quantum computers are going to be around you. 

Ann Berry (21:23):
Dr. Subodh Kulkarni, chief Executive Officer of Rigetti Computing, thank you so much for joining amazing insights into what's going on in Quantum. Please come back. I think that this is a topic that's going to stay hot for a very long time. I'm Anne Berry. Thanks for tuning into After earnings, the show that brings you up close and personal with the executives behind the world's most interesting publicly traded companies. If you learn something today, don't forget to like, subscribe, and share with your friends. Upcoming episodes will feature CEOs and CFOs from Hasbro, Roblox, and many more. Come back and we'll see you soon.