Why QCi and QPhoton?

Mike Elliott at CEO Roadshow talks with our CEO, Robert Liscouski, about why QCi acquired QPhoton and the value we expect to bring to market, applications of QPhoton that benefit quantum possible use cases, and the unique twist of a software company buying a hardware company.

Below is the transcript of their conversation.

Mike Elliott

Hi, I’m Mike Elliott and you’re watching CEO Roadshow today. We’re going to speak again with Mr. Robert Liscouski, CEO of Quantum Computing, Inc., a leader in making quantum computing affordable and accessible to business users, not just the quantum elite workforce. They trade on the NASDAQ under the ticker QUBT. Good morning, Bob. Welcome back to the show.

Robert Liscouski

Morning, Mike. Thank you very much for having me back.

Mike Elliott

Bob, why did Quantum Computing decide to acquire QPhoton?

Robert Liscouski

So, it’s really a natural course of events for us. You know, let me go back to the original premise of QCi. We want to make quantum computing an accessible, affordable business solution across the board. Right? And, you know, our platform Qatalyst is really focused on being able to provide end users with access to various QPUs and you know we’re QPU agnostic. So, we’re trying to bring the best of breed capabilities to end users for their solutions.

And in our quest to do that we came across QPhoton and the work they’re doing in the space is really interesting. It’s not just about quantum computers. It’s across a variety of different areas within quantum technology and computing. The bigger domain is highly interesting to us in terms of solutions, everything from LIDAR, quantum networks, quantum key encryption or actually quantum privacy is more appropriate. And then, ultimately, the accessibility of their QPS through the use of their photonics capability—that we believe is going to be pretty game changing.

Mike Elliott

Great. And, Bob, what’s the initial value you expect to bring to the market?

Robert Liscouski

Well, value. I’m not going to give you a dollar amount, but I’ll certainly give you a very tangible, value proposition for the community because that’s where we’re focused. In terms of value, the premise of QCi is democratization of quantum computing and philosophically we’re so well aligned with QPhoton and their approach to do exactly the same thing with democratization of quantum computing, bringing real solutions into the marketplace for non-quantum experts.

So, the value, not just to the market and to our shareholders, is we’re becoming more of a full-stack quantum computing company. While we’re still going to obviously work very closely with our other partners, the additional capabilities QPhoton provides to us is going to bring significant value in certain areas that we believe are very interesting to the problem sets that our clients are having, particularly in the machine learning and AI, and optimization capabilities.

And we think the combined value of both QPS on QCi will really enable the democratization concept to be achieved. If you look at QPhoton capabilities, specificallythe Quantum Photonic Systems (QPS) designed by QPhoton, it’s a much more scalable and affordable quantum computing approach than what we see existing in the marketplace today. The traditional quantum computing data model requires significant infrastructure and extremely high cost upfront. Total cost of ownership is high.

Using photonics, quantum computing enables a client to be able to run on premises. They can run quantum computers at room temperature with very scalable solutions that don’t require a lot of infrastructure – translate that to affordable. Which, like I said, aligns very well with what we’re doing. The value we expect the market to realize is to be able to use really effective quantum solutions in the business environment in the very, very near term.

I’m very sensitive to what’s going on in the marketplace today, right? This is no surprise in terms of market conditions being where they are with respect to quantum computing. It got pretty overheated in the beginning. There were a lot of expectations in the marketplace about what quantum computers could do in the future. And as we’ve seen, there’s been a very incremental increase in quantum computing capability. That frankly hasn’t brought any real business solutions to the marketplace yet.

The opportunity for QCi and, and QPhoton is really to address—at the business solution level—things that we know, and we can demonstrably prove, are going to be able to show real business value at cost points that don’t require significant investments that we see going on in the more traditional quantum computing space.

Mike Elliott

What applications and users do you expect to benefit from this acquisition?

Robert Liscouski

Not different from what we’re currently targeting already with QCi, which again makes a very natural add-on to what we’re doing. So, we’re focused on supply chain logistics, we’re focused on optimization problems, and the QPhoton capability is right dead center on that.

We’re also working in the ML and the AI area. Qatalyst is the ability to pre-process a lot of information that can be used by a variety of QPUs to do some of these big data and AI applications. And the QPhoton capability is like dead center in that. So, as a complimentary add-on to what we’re already doing, we’re going to continue to pursue those markets.

There’s some other areas that we think QPhoton has some tremendous IP in, outside of the areas that we’re initially focused on, but they’re tremendously complimentary to the areas that we think are going to be very interesting in the marketplace.

One of those is quantum networks, the ability to secure a quantum network and actually use quantum computing technology to establish a quantum network and quantum privacy. So when we talk about cybersecurity as a domain, there are many facets to cybersecurity that have to come together to enable a holistic cybersecurity solution.

Encryption is only one of those things, but it’s not the entire solution from a cybersecurity standpoint. You need the ability to have a secure pathway. Quantum networks provide that secure pathway. You need to have authentication. You need to have quantum privacy. Those things which are elusive today in more classical and computing environments are things that QPhoton’s technology are well positioned to address.

Mike Elliott

And Bob, what’s the financial and revenue opportunity for QCi with the joint solution?

Robert Liscouski

Well, again, I’m not going to give you forecasts in terms of what we think the revenue opportunities will look like in terms of material sales to us, yet. We’re going to be getting into the marketplace once this transaction is completely closed in a very aggressive way.

We believe very confidently that the amount of money that’s being allocated for quantum exploration with the clients that we’re talking to will fall well within those parameters of being able to provide real solutions to people and businesses that have real problems to solve today–and that have budget set aside for doing these things in an experimental way. We’re going to demonstrate that we can provide real business value to them, and we actually believe that’s going to help us grab that market from a business solutions level versus an experimental level.

Robert Liscouski

I’ll be in a better position to give you sort of forecasts as the year goes on. We absolutely believe that there are tremendous opportunities. If you look at what’s going on in the marketplace, just recently, the Biden administration re-emphasized its commitment to quantum computing at a national security level and national scale. They recognize a national security implication to quantum computing.

They recognize that quantum computing is clearly going to be a tremendous value-add to both the national security space and to the general economy and the things that we’re doing. If you go back and read through that executive order and the related documents, they’re right square where we are focused and bringing value with a combination of QCi and QPhoton.

Mike Elliott

It’s rare for a software company to buy a computing hardware company. What are your thoughts about that?

Robert Liscouski

We aren’t limited to doing things that are the more traditional conventional way. We don’t think about this in a paradigm of saying, well, you know, we’re a software company, we can only do these things. We’re about bringing value to the customer. And in this case, we’ve got the benefit of being able to do an acquisition in the hardware space, which is going to be completely accretive to our software platform. So, we don’t think in the context of, like I said, what’s traditional, what’s the Orthodox thing to do.

We want to focus on delivering customer value. And the great thing about being an entrepreneurial startup company, even in the public market space, is we’ve got the ability to act quickly. We have the ability to go after what we think are going to be value propositions that are going to sell. And we’re going to be very thoughtful and very careful about it, obviously. But we don’t have to take the traditional route.

My personal philosophy is always to do the non-traditional, to do those things that are not predictable. I’m not driving it from that point of view, but you know, for me, I delight in being able to do things that people don’t expect us to do.

Mike Elliott

Great. Well, Bob it’s always a pleasure having you on the show. Thanks for joining us. And we look forward to talking to you soon again for another update. It looks like a lot of exciting things ahead for quantum computing for the remainder of 2022.

Robert Liscouski

Thanks Mike. I appreciate the opportunity and I’m sure we’re going to have a chance to talk about some great things in the future.

Mike Elliott

Looking forward to it. Thank you.

Robert Liscouski

You bet.

Mike Elliott

Once again, we were just talking to Mr. Robert Liscouski, He’s CEO of Quantum Computing, Inc., a leader in making quantum computing affordable and accessible to business users. Right now, they trade on the NASDAQ under QUBT. So add them to your radar to learn more about them, please visit their website at www.quantumcomputinginc.com.

And, we, of course, are continuing our coverage of quantum computing, including our first live webinars, which will be coming up in the next month or so, as well as more interviews. So stay tuned on CEOroadshow.com and, as always, thanks for watching.