Real World Problems
In which words have meaning
Disclosure: I have a long position in $DMYI, which will convert to $IONQ if/when the merger goes through.
Anyone who’s been keeping tabs on quantum computing for any length of time is well acquainted with the bullshit, dissembling, hype, and mendacity that suffuse the day to day. Much of this is produced by journalists who have to cover this stuff, but have only a tenuous grasp of the basics. Some is produced by grifters adding ‘quantum’ to the names of their companies and pretending they have any value to offer. Some is produced by the QC companies themselves as PR announcements, and then amplified by ‘industry’ publications that act essentially as glorified PR reposters. And, of course, some is produced by academics themselves, or by university PR shops.
So press releases, while sometimes informative, can also be dangerous, especially in QC. They need to be read carefully, with a big ol’ grain of salt.
Perhaps due to their upcoming SPAC merger, IonQ has issued a couple new press releases in the past few days.
IonQ, the leader in quantum computing, today announced that it is tripling its expectation for 2021 total contract bookings from its previously announced target of $5 million to $15 million.
This is pretty cool! According to the IonQ investor slides, $15 million is the expected revenue in 20221, so they’re ahead of their projections by a year. That’s definitely some good news.
But then:
“We could not be more thrilled with the progress we are seeing in IonQ’s commercial efforts as a growing number of customers are adopting quantum computing. Quantum computing has arrived and is solving real-world problems in 2021. We fully expect to see more marquee wins as our industry-leading technology continues to advance,” said Peter Chapman, President and CEO of IonQ. “Tripling our expectation for bookings validates that the market for quantum computing is here now. We are bringing quantum computing to the Fortune 500, along with leading governmental and academic institutions. The future looks bright for IonQ, and we are just getting started.”
I guess it’s basically Peter Chapman’s job to make wildly overblown statements like this, so I don’t hold it *too* much against him. There aren’t any lies here, exactly, but you have to be pretty careful about interpreting what’s being said. My take is that some big companies are willing to spend a little bit of money ($15 million among a few Fortune 500s, gov’t and academic institutions is not real money) to solve some toy problems and get familiar with IonQ’s offerings.
The whole release centers around this phrase ‘real-world problems’. Sounds exciting, but it may make your local QC practitioner roll her eyes in exasperation. The why of this has a lot to do what professionals in the field expect when someone says ‘real-world problems’.
What even IS a real-world problem? Is simulating the ground state of a water molecule a real world problem? Water is real, I’m pretty sure. It could be a “problem”, but it’s been solved on classical machines for a long time and frankly you probably can’t make any money off of it. I don’t think I know anyone who would agree that such a simple problem could be considered a ‘real-world problem’ in the context of the IonQ press release quoted above.
What would we have expected instead? Well, something harder and possibly more business relevant, for starters. How about simulating the FeMoCo molecule, or cracking Bitcoin public keys?
I doubt a Fortune 500 company would pay IonQ a few million dollars to simulate water, and we know IonQ devices aren’t yet capable of simulating FeMoCo. How about a smaller problem that might still turn some heads? For instance, one might ask IonQ to optimize the schedule of a logistics fleet, but instead of thousands or tens of thousands of trucks, trains, planes, and ships, maybe just do a few dozen. Or, instead of optimizing a portfolio of thousands of equities, maybe optimize a much smaller one. The arXiv is littered with examples like this.
Are these radically simplified problems considered ‘real-world’? Well, I suspect no one really cares about the solutions to them, BUT they might just be big enough and relevant enough to pay for. You’re not buying the solution, you’re learning how to operate new technology to solve your problems in a few technical generations.
I’m guessing that most of these partnerships are orgs that are (rightfully) interested in QC, and interested in using IonQ’s admittedly impressive technology to figure out if there’s real future use case here.
The fact that IonQ has booked revenue on the level it expected to have next year, is a good omen, but it might be a little early to go full WSB degenerate on DMYI short-dated call options. Despite Mr. Chapman’s assertion, quantum computing isn’t really “here”, yet. There is still a lot of technical risk and it’s a long way from 22 qubits to 22,000. A lot of technical development, integration, basic science, etc still needs to be done. How will we know when QC is the really here? Personally, I would consider an actually profitable QC company a good sign. According to IonQ’s investor presentation, this could be as soon as 2027.
We’ll see.
Slide 34