Alphabet spins out a new subsidiary, and in a sign of the times, it’s focused on quantum tech – TechCrunch

Quantum tech may be having its moment at long last.

Early this month, one of the few “pure play” quantum tech companies in the world, Rigetti Computing, went public by merging with a special purpose acquisition company or SPAC — and it only narrowly missed becoming the first publicly traded company to expressly focus on commercializing quantum tech when another outfit, IonQ, went public through a SPAC merger in October. Another rival in the space, D-Wave, says it is also now planning to go public via SPAC.

Yet in a move that some might interpret as the strongest signal to date that quantum tech is ready for prime time, Alphabet said this morning that it’s spinning out its six-year-old quantum tech group, Sandbox AQ, into its own standalone company.

Jack Hidary, who was formerly the director of AI and quantum at Sandbox and is a longtime X Prize board member, will continue to lead the 55-person, Mountain View, Ca., outfit as CEO.

Sandbox has also assembled an enviable cast of advisors, including former Alphabet Chairman and CEO Eric Schmidt; former JPMorgan chase executive Blythe Masters; and John Seely Brown, the former chief scientist of Xerox PARC.

Notably, too, Sandbox — which describes itself as an enterprise SaaS company that’s developing commercial products for telecom, financial services, healthcare, government, computer security and other sectors —  is rolling out with an undisclosed amount of “nine-figure” funding from a long list of outside investors, including Breyer Capital, whose founder, Jim Breyer, has also joined Sandbox’s board of advisors.

Section 32, Guggenheim Investments, TIME Investments, and accounts advised by T. Rowe Price Associates are also in the investor mix.

Certainly, market demand partly explains Alphabet’s decision to spin out Sandbox. According to Gartner, by next year, 20% of global organizations are expected to budget for quantum-computing projects, up from less than 1% in 2018.

Among the customers already paying Sandbox for its computing power are Vodafone Business, Softbank Mobile, and the Mount Sinai Health System.

But judging by a recent chat with Breyer, perhaps an even bigger driver of growing interest in quantum tech is the realization is that, while true quantum computing — meaning the unfettered ability to harness quantum physics to zip through numerous possibilities within a fraction of a second and determine a probable outcome through quantum computers — could be five or more years away, other related tech, like so-called quantum-sensing technologies — are fast becoming a reality.

Indeed, rather than work on quantum computers, Sandbox is instead focused on how quantum tech intersects with AI, with past work involving the creation of more powerful medical sensors.

As Breyer said when we spoke a couple of weeks ago, “There are tremendous national security opportunities for the quantum companies, and that’s where a lot of the businesses is right now, with the three-letter agencies, like the Department of Defense. But what I’m really excited about today from an investment standpoint is not necessarily the big super capital intensive quantum computers . . . but areas like quantum sensing.”

Think of a very high-powered 1,000x light microscope that can be applied to medicine, Breyer said. “There are quantum sensing technologies today that are being piloted at some of our great hospitals in the United States that I think will revolutionize areas such as cardiology [and] drug discovery.’

Put another say, said Breyer, quantum computing platforms will eventually play a role in helping catch diseases faster, improve security systems and to protect all kinds of data. But larger organizations, including governments and corporations, are no longer waiting for those massive quantum computers to arrive. “There are quantum technologies now where — they’re not at the breakout point of where quantum computing will be in four or five years —  but are making a very big difference,” he said. The team at Sandbox, he suggested at the time, is among those leading the charge.