E499 | Christophe Jurczak, Quantonation: Quantum Is Here: Europe’s Deeptech Moment

0:00For decades we've heard the same story about quantum computing. Some people even say that's always the technology that's coming in five or ten years. We are investors in quantum technologies at Quantum Nation, and I'm deeply convinced, indeed, this is the time. What changed? The breakthrough that's turning century-old science into today's hottest market. But we're on a path where companies are showing larger computers, and I think that's an important aspect. But I think the combination of AI and quantum will accelerate the adoption and the applications of quantum technologies. using AI for quantum, but also quantum to improve AI.

0:34But here's the proof that skeptics can't ignore. Qubit Pharmaceuticals, the team is strong of about 50 people. So they have shown a few months ago that you can use GPUs and quantum processors in order to generate so-called synthetic data to train foundation models. And ultimately, to have an agent that's going to be very expert at quantum chemistry. Yet there's one critical gap that could determine who wins this race. Europe is definitely very strong and very well positioned for all this stage. Where capital is missing, in particular for European startups, it's really late to stage. The window is closing.

1:09Here's what quantum investor Christoph Jurczak wants you to know. Quantum is not science fiction anymore. Quantum is real. You have companies, you have strong ecosystems developing machines, products. It's not just science anymore. Don't miss this deep dive into quantum's commercial breakthrough. Available now on the EUVC podcast.

1:54Welcome back, everyone, to another episode of the UVZ podcast. Today, we're diving into the convergence of quantum computing, AI, and blockchain with Christoph Jurchak from Quantum Nation. With recent developments like NVIDIA's CEO Jensen Huang declaring quantum computing at an inflection point and Multiverse Computing's impressive$215 million funding round to compress large language models by up to 95%, the landscape is rapidly evolving. Christoph, with his extensive experience in quantum technologies, will shed light on how these advancements are not just theoretical, but actively shaping the industries today.

2:32So Christoph, we've all seen the headlines. NVIDIA calling this an inflection point. Time saying that quantum era has already begun. But is this hype or is it a real paradigm shift? Yeah, good question. And hi, Andreas. Thanks for having me. Yeah, we've seen that, these kind of headlines for a while. I think that's, and some people even say that's always the technology that's coming in five or ten years. So it's really a legitimate question to ask oneself, is it really the beginning of something? Are we at the inflection point as the quantum era began? So I'm showing a couple of illustrations here, but we've seen that over time.

3:08We are investors in quantum technologies at Quantum Nation, and I'm deeply convinced, indeed, this is the time. We have invested since 2018. I came back into the sector since 2016. And I want to show you a couple of funny pictures, maybe to start with, because I think that's really important. What you need to have in this kind of sector is really the expertise to understand at what stage you are. Here is a picture of me somewhere with a little bit more hair, here on the right, with Professor Aspect, with the moustache on the left. He's the Nobel Prize 2022 for quantum physics. And I was doing my PhD at the time, in the 90s, in a physics lab.

3:46turning the knobs, adjusting lasers and these things. So really the beginning of quantum applications, really. Quantum science is much older, obviously. And then fantastic thing is that 30 years later, that's a picture we took class here. It's me again with Professor Aspects after Nobel Prize. It's collected in 2022 and he's working with us. And the industry has dramatically changed. Whereas in the 90s, we were doing science, very fundamental things without really too much of a view on what it would be good for. Now, these days, there are startups in that sector, there are young people like the one in the picture who take a job in quantum, quantum technologies, quantum starters, quantum funds.

4:27And Alain, we're very fortunate to have him still with us. And a message I want to give, maybe to start with, and we illustrate that with a couple of applications, which I think make a lot of sense, is that this is a science that's relatively old. It's the beginning of the 20th century. Everybody knows this picture from the Solvay Conference, 1927. You see very familiar faces, Einstein, Marie Curie, Schrodinger, Heisenberg, etc. So the science is relatively old. Well, it's mature. It's 100 years. Actually, we're celebrating that this year, two years earlier than that. That's a year of quantum officially for the United Nations.

5:07But what is really interesting and important is that now, in 2025, we start really to develop applications in a way in the operating system of the world, which is quantum mechanics, not Newtonian physics, 19th century or even earlier, 18th, 19th and 20th century classical mechanics. Now we can leverage the science, we can build applications in compute, sensing, and I think that's the inflection point people are talking about. That's why it's so exciting. And we definitely see an acceleration in science. We need a lot of fundamental science, hardware, machines, engineering, and also applications.

5:48Now that I've introduced you to this idea of the world operating system based on quantum mechanics, I want to show a few applications that are portfolio companies in the funds are working on in four sectors, healthcare, energy, security, climate, shown here. And we'll talk about AI a little bit later, and I'll have more to say about that. But these ones, I think, are pretty spectacular. These are real things, real things, real applications companies are working on. This is not science fiction. I think that's the important thing to keep in mind. So the four segments I want to talk about were health, energy, security, climate, a bit about compute as well, giving some examples of companies and markets.

6:29So the first one in healthcare is actually a use case. Two companies in our portfolio, Pascal, which is a quantum computing company, Hardware and Qubit Pharmaceuticals, which is a software company, are working on. They're using quantum processors to design molecules for new drugs. They use the power of quantum computers that are inherently good at doing simulation of chemistry in order to develop new molecules that would be less toxic, more effective, have a better impact on the target. And above all, they're using SuperScan Qubit's technology to shorten the time it takes to develop a molecule.

7:09Instead of doing lots of experimentations, you can substitute part of it with a compute part, so-called in silico, and reduce with classical and quantum computers the time to deliver these monitors. This is still early days, but we have good evidence that using quantum computers here, we get new molecules, new materials as well. This is a use case, which I think is definitely the most important in the short term, to get materials for catalysts, for example, new forms of catalysts. And that's really, let's say, in a way, the key error for quantum computing, in my opinion, in the short term, designing molecules.

7:48And of course, the markets are really big, a couple hundred billion at some point. It is a very small market for now, but it's true for everything in quantum. But it's supposed to grow quite a bit over the next couple of years as soon as we will have better machines and better software as well. Can you just, on this specific application for health and maybe even for all of them going forward, talk a little bit about the inflection point or why you think now is actually the time? Because that's what many, of course, are fearing or thinking around quantum is that we've all for a long time been saying now is the time and then it's not been the time.

8:26Yes. So the reason why I believe that now is the time, so there are two reasons actually. So one is that machines are progressing and reaching a number of qubits. So qubits are the unit of information quantum computers are built on as supposed to bits for classical regular processors. So one thing that is important, so there are many parameters which describe quantum computers, but you need a relatively large number of qubits in order to perform complex computations. So we have reached a point with certain technologies, that's the case for nuclear atoms here with the company Pascal, with superconducting technologies.

9:07It's another way to do quantum computers with IDM in particular, also with ions, where you have hundreds of qubits as opposed to a couple or tens. And you need that in order to be able to process complex things. People say you need thousands, tens of thousands, maybe millions. For sure, the more, the better. But we're on a path where companies are showing larger computers. And I think that's an important aspect. The other aspect is that the way people are approaching applications is shifting a little bit. I think we'll talk a little bit later about that as well. But I think the combination of AI and quantum, which is really new this year, essentially, or let's say over the last year, I mean, will accelerate the adoption and the applications of quantum technologies using AI for quantum, but also quantum to improve AI.

10:04And I think that's completely new, very disruptive. And that's a way to accelerate the path to applications and, as you said, to go beyond the inflection point. Can you describe in a little more detail what is that revolution here, so to say? Why is it that the application of AI or the coupling of AI and quantum is actually so powerful? A very recent development that's made by Tubit Pharmaceuticals, again, a company in our portfolio. They're based in France and in the U.S. The team is strong of about 50 people. The computational chemists, they're developing molecules. So they have shown a few months ago that you can use classical, so GPUs and quantum processors in order to generate so-called synthetic data to train foundation models.

10:57And ultimately, to have an agent that's going to be very expert at quantum chemistry is going to be able to generate new molecules. The novelty here is that you can use these technologies of compute to train the model. Usually people were doing, let's say, more traditional simulations, simulate directly the chemistry in the very deterministic mode. So simulate the chemistry, the reaction, the dynamics, and you get the end result. I think here the new thing that I have shown, which in my mind is very, very important, and will have a quite profound impact that you can use even relatively imperfect quantum computers.

11:38So the ones we have now that are not completely mature, hundreds of qubits, mentioned earlier, tens of qubits even, without a correction by coming to it. But you can use these machines as they are to generate data and train the model. It's not an LLM like we have in the large language model. It's a different form of model. It's a Fanderson model. That's what it's called. That's going to be a top expert in quantum chemistry. So this combination of training the model with quantum is very new in the words of one of the founders of qubit. It's going to accelerate the adoption of quantum computers by five years, he said, I tend to believe that it's true.

12:16That's the kind of combination using classical, quantum, AI together in a very good synergy that's going to get to accelerate adoption and get to have more applications in the short term. All right, let's go back to the other use cases, exemplified, of course, by the established portfolio. Another use case that I found very exciting, it's also in the field of materials. So it's not related to quantum computing in that case, but it's a company that we have in France. It's called Pionic. They're developing new materials for energy storage without lithium, without cobalt, and they're using so-called quantum materials.

12:55What's really interesting here is not the usual applications that you have in mind, which are compute, communication with quantum technologies, but you can also use quantum technologies directly for materials for energy. So these are quantum materials in the sense that there are very strong correlations between the components, electrons, atoms, that cannot be described in a semi-classical approximation. So it's a bit technical and tricky, I'll admit, but it's new classes of materials for new applications. That's the thing to keep in mind. And we were not able, without quantum science, quantum computers, to understand actually how these materials behave, how you can get to have them really exciting electric properties like we have with these materials.

13:43So with example, it's a pre-seed company we've invested in 18 months ago. Now we're raising the seed round. So progressing, the science is improving. I was on the board a few days ago. They're showing devices, showing how the technology is getting there. Of course, the markets are huge. It's a market for energy storage, not necessarily mobility, but stationary energy storage, large batteries, but also maybe more in short term in that case, very small batteries, like, you know, the kind that you can find in a phone or anything, electronic cards. And that's super interesting because in a way that's quantum technologies that's finally reaching people.

14:24That's something that we're told often, what is it good for? And it's true that it's usually applications in so-called B2B sectors for industry. it's hard to see applications for the applications that have a direct impact like AI for example has with LLMs or things like that in quantum it's a little bit more indirect except in that kind of situation we will have quantum materials ultimately that can maybe they will make it into your smartwatch so quantum technology that's going to generate the energy that you need for your devices and I think that's a very important thing to keep in mind quantum is coming also to applications that are closer to people.

15:05And that's something we're very interested in. In that specific case, it's material that's safe, doesn't burn. You have many issues with lithium, as you know. And of course, it's not dependent on geopolitical issues. And it's a quantum material at room temperature. So very excited about this one. Very new, very early. But that's the kind of thing that we are really interested in. And I think more of this kind of idea will come over the next couple of years. It is incredibly exciting. Let's just talk security, climate and compute just real quick. Yeah, I will talk about, I will introduce an application that I think is very, very exciting, feel of climate, maybe to start with.

15:44So it's a company you've mentioned, Andreas, a bit earlier, fundraised by Multiverse. So obviously, it's a company that has raised seriously around 215 million. We've been investors from the beginning. It's a business company made in Europe, I think, for this podcast is very important. So they have been developing a technology that's called tensor networks. Wiltiverse has been founded by physicists who are really experts at at least mathematical formalism. So tensor networks are a tool that's used to describe interactions in quantum systems. So again, it seems a little bit abstract, but the thing that is impressive is that over the years, they have been able to find an application that's really amazing.

16:28They use these technology, tensor networks, this mathematical formalism to compress large language models and to make them more efficient. The kind of chatbots, actually, you're talking to. So they can, and as you know, probably chatbots and LLMs consume a lot of electricity in particular and have a very big impact on the environment. Of course, we're looking for ways to minimize that. And this technology, that's so-called quantum-inspired because it's running on classical computers, GPUs, but the formalism and the idea and the science is coming from quantum. So it's a bit of a combination, classical hardware, quantum science, in order to improve an application again for every day.

17:13So increase the speed of training the models, reduce the cost of running them because you're reducing the energy consumption in particular for training and inference as well. So it's a very beautiful combination of quantum science, quantum technology, and AI. Again, I think there's a little bit of a pattern here to get to applications in the short term. And it's today. This is an application that you can find on AWS, for example. You can go to their website, use it. Many people are using it. They're generating revenues with that. So it's, again, quantum today. something that's not as mentioned earlier in the realm of science fiction and the last application I wanted to talk about maybe as an introduction is in the field of communication it's a company that's based in the US, it's called QNECT showing on here the network they have been developing so they're using a photonic network optical fiber that we have all over the world In that case, there's one in New York and one in Berlin.

18:19They have been using these networks to send single photons over the networks, one at a time, in a way, to implement new forms of communications. So why would you do something like that? Usually you would use many, many photons with lasers to communicate. Here the idea is that with single photons you can generate quantum effects, so-called entanglement, for example, generate two pairs of photons where the photons are connected to each other. And that has a profound impact on communication, on the way you secure communication between parties. Again, it's a bit challenging to get the intuition of that.

18:56I will admit, but essentially that's a system that's not hackable. So supremely safe against hackers. Again, early days, but real deployments, true deployments, New York, Berlin. so that's things, that's a kind of technology that's the future of the internet actually it's called quantum internet that's going to come over the next couple of years new forms of infrastructures using existing networks and to protect, it's sad to say but to protect essentially against the power of quantum computers because quantum computers are super strong in principle at breaking encryption there are some particularities, there's an algorithm that has been developed for that specifically about 30 years ago.

19:41So we need to protect against that threat that will happen at some point. And this is also with quantum technologies that we're finding the solution. So very beautiful use case, deployment now, machines that worked. You see on the picture, they have nice cabinets, including all the technologies, no cooling, room temperature. And that's something that you can implement on existing infrastructure. You don't need to build completely new communication infrastructure. Leverage what you have, substitute the equipment, and get to the quantum internet, which is pretty cool. Going from this deep dive into applications and work, and very clearly hear that there's a lot of science you need to understand here.

20:22Maybe not to listen to this episode, but to be able to diligence a company and a solution and see if you actually want to invest. Maybe you can talk a bit about the importance of coming from a quantum background or truly understanding quantum if you want to be a successful investor in this space. One of the biggest challenges for making investments in quantum, and back to the first things we've discussed, is really for investors to be able to make a difference between what's hype, pure speculation and fantasy in many ways, and what's real. And how to make the distinctions is really hard, for venture capital in particular.

21:01So you can ask experts, of course, you can ask scientists to help you understand. but usually pure scientists, I mean, they're missing a little bit, we say they lack a little bit of imagination because you need to have a bit of imagination to figure out what the technology will be good for without hiding the challenges. So if you focus too much on the challenges, you're not going to develop new applications. And if you're a little bit too speculative, you overlook the challenges. So what we're doing, I think the way to go is definitely in a venture fund. that's interesting, investing in quantum science and deep tech in general, I think it's really you have to have in the team, in particular in the investment committee, team members who have a background in the science, actually, in physics.

21:49So, at Quantum Nation, we have three partners, and it's a good combination because we have two. Me has done a PhD in quantum physics in the end of the 90s with Alain Aspe, another partner with Zeng, has done his PhD in the UK, in Oxford, and has worked in a quantum startup as well, hardware and software, before joining the fund. And Olivier Tonneau, who has more of a more classical VC background. So this combination is great, but it's in the investment committee. It's not just a question of advisor. I mean, you need to form a vision of a conviction. And I think that's what is really key in what we're doing.

22:26And that's something I'd like to see more in VCs. Get the expertise very deeply into the team. but there's really a true ambition and a true deep end on the application of these technologies, not just consulting experts who get you to make a decision. And that's very, very important, particularly if you want to be a lead investor, lead followers, of course, that's different. So investors who want to have access into quantum as a follower, you don't necessarily need that, I will agree, to have a very strong expertise. But if you want to be a lead investor, and we need more lead investors, in particular in Europe, I think it's really important to have the expertise into the team.

23:05Yeah, I always, I don't know if I would say that I frown on people that think that they can diligence their way through something difficult by using consultants or advisors, because it is wrought with a lot of problems. And I have at least personally seen how researchers can have very differing views. And we've seen so many cases where obviously the professors and the so-called experts are completely unable to see what the founders are able to see. And I think that as a VC investing in this space, you've got to have that taste. You've got to have that understanding yourself so you can go and live the world of the founder, so to say, because otherwise you're not going to be, like you cannot expect a researcher, despite them being experts, to be able to go into a founder's vision and view on things.

24:06Also because it's often contrarian. So by definition, if you go to a broad group, then you should get, or to an expert that is very much an expert in the usual world, you will automatically get the wrong conclusion. conclusion. Yeah and I think I'd like to build on that a little bit because I think that's a very top shot as well. I want to show you a couple of things about one of our portfolio companies which is called Pascal and Quantum Computing. They're developing machines, quantum hardware. As you can see on the picture here, this is a quantum computer. A real one is a super computing center.

24:42There's one in France that has been installed. There's one in Germany in Eulish, close to Cologne that's being installed at the moment. There will be in Italy, Saudi Arabia, etc. So we're very far from the lab. I think it started in the lab 2019 with researchers. Now we're building shipping machines, putting them in planes, sending them all over the world, installing. That's challenging. But then you have access through the cloud, etc. The thing I want to mention is that what I've been impressed with is that I think scientists don't underestimate a little bit the power of engineering, actually.

25:22So once you have the science done, it takes a lot of time, decades, and we need more fundamental science. But then after that, and that's what I've seen at Pascal, a really impressive way they have been able to integrate the components, make it reliable. And once you're there, you have, let's say, again, maybe this notion of inflection point is valid here as well. Once you have this engineering device, I think things get much faster, actually. Scientists tend to underestimate the power of engineering and what startups can do. And I think that, to me, is amazing. With engineering, with EC, with the kind of thing that we're doing, I see companies progressing even much faster than I would have anticipated a couple of years ago.

26:07And that's the thing that's happening in the quantum field now. putting bright minds, putting money, of course, into these companies, also combining different kinds of talents. What's really key, what you can do in a startup very well is combining computer scientists with physicists, for example, and working together on applications. That's also something that Pascal is doing on graph machine learning, this kind of thing. It's really hard to do in the lab or in the academic world. Interdisciplinarity is not something that's easy to deal with. In a company, I'd say, well, literally, you put the people in the same room and you ask them to work together.

26:45Computer science with physics is very, very powerful. I think that's the way to go for applications in particular. I'd love to ask you about the financing risk of this space. Is there enough capital? Because when you come in as a believer like you, it can be tempting to bet on a technology that the rest of the market is not there yet. Yes, there's enough and not enough, but in different ways, I'd say, for quantum. So, first, I think to keep in mind that this sector has started relatively recently. So I tend to put a starting point in 2016 when IBM put a couple of qubits online and their machine was accessible for people to program, work with, and the system was developed around that.

27:32I mean, for me, that was one of the drivers for me to come back from where I was in renewable energy, actually, at the time, back to quantum, because I felt like something had happened. It was maybe also an instruction point, a different one, but that was definitely, for me, an eye-opener. So, 16, 17. And then, we're talking that thing, quantum often, in 2018. So, very early, because we had the strong conviction that the operating system of the world was quantum. and then it was the right time to get in. It started heating up for this even share capital a bit later, 2021, 2022, about$2 billion,$2 billion and a half of this money going into quantum.