This transcript has been generated using machine learning technology. While this technology was trained with CIBC terminology, it may contain errors.

Colin Ryan, Managing Director and Head, Technology and Innovation, Investment Banking: Christian, thanks for joining me today. It’s good to see you.

Christian Weedbrook, Founder and CEO of Xanadu Quantum Technologies: Yeah, thanks for having me.

Colin Ryan: Going to focus the conversation. A few different topics, I think. First, your personal background a little bit about quantum computing so we can educate folks on what that is. The founding story on Xanadu. And then I think how you decided to take Xanadu to the public markets. And then finally, your outlook for quantum computing. There’s a lot of focus on that right now. So I think that the discussion today is very timely from that perspective.

Christian Weedbrook: Yeah. Sounds great. Thank you.

Colin Ryan: So maybe to start on the on the personal side, you know, most CEOs of deep tech companies start, you know, get a PhD and spend their time studying things like mathematics. You actually started your education in film school I believe and dropped out of that. And so, how does a film school dropout end up being the CEO and founder of one of the world’s leading quantum computing companies?

Christian Weedbrook: Well, I think if you look at a lot of the history, you need to have a drop out aspect somewhere on your career to be successful. So I’d rather dropped out of something that wasn’t leading to where I was going. So it was more just I see them both very similar to being a director or being a founder, you know, in the abstract sense you’ve you’ve got an idea, you’re excited about the idea, you’ve got to raise money from folks, whether you’ve got a script and you need to raise money or a startup like a quantum computing startup, and then you’ve got to get people together, get the money, and then start building. So they’re very similar from that, from that point of view. I always remind people that I am not dead yet, and I still may end up a film director. That’s the pipe dream still. We’ll look forward to you on the Oscar stage one day then.

Colin Ryan: Yes. Yes, exactly. All right. And after film school, you did go to more traditional academia and and studied math when you’re studying math and working on your PhD. When did quantum computing and the idea of quantum computing, and this being something you wanted to devote your life to, when and how did that click for you?

Christian Weedbrook: It was always step by step, following my curiosity and what I was kind of competent at. And so I, I did math, first, majored in math. I started that degree, then I was liking more the applied side of math. So I ended up majoring in math and physics, really headed towards physics, then doing my masters. Quantum teleportation, quantum security, secret codes, and all of that we’re starting to become more publicly known, at least for me. And I was really excited by that. And then I discovered quantum computing. And so I went through a PhD program with the focus on quantum security and particularly quantum computing. So it was really just the excitement of the field. And that was, I started my PhD in 2005. That was for four years. And then so that’s like 21 years ago and have continued since then, everyday learning about quantum and obviously trying to commercialize it now with Xanadu. And we’ll come back to commercialization later.

Colin Ryan: But just on that, we’re still a few years away from utility scale, a utility scale quantum computer. But back in 2005, you would have been 25 or 30 years away from that. Like, you have to have a lot of conviction to spend your life doing something that’s 25 or 30 years away. Did you ever have doubts or lose any of that conviction over that time?

Christian Weedbrook: The PhD wasn’t about getting the knowledge to start a company, it was really about learning and enjoying that. So, but I’d always enjoyed to this day reading about entrepreneurs and businesses. So I was hoping they would converge. But if they didn’t, they didn’t. So in 2016, decided to start Xanadu here in Toronto with the idea of converging both the entrepreneurial side that I love and what I’d learned in academia. So when you’re driven by knowledge and curiosity, there’s always something to learn. And so it didn’t really I didn’t really have doubts, because even today, I don’t have doubts about whether Xanadu is going to succeed. It’s not because it’s 100% sure. You know, each year that goes on, and particularly since going public, it’s getting closer to 100% sure, because it’s hard to build these utility scale, large scale quantum computers. But when you’re driven by the love of what you’re doing, you’re driven by the excitement and the ability to learn every day that kind of at the very least, you’ll always have that.

Colin Ryan: Yeah, that makes sense. Okay. So that’s great on your background. Let’s talk about quantum computing and just sort of set a foundation. What it is, a simple question… what it is and how do you compare and contrast to two traditional computing?

Christian Weedbrook: I’ve always answered this in many different ways. The one I’m kind of thinking about and been answering it lately is really one of our quantum computers at Xanadu built. We built this quantum computer called Borealis, and Borealis solved a problem that would have taken the world’s fastest supercomputer at the time, 7 million years to solve. And our computer solved the same problem in two minutes. So it’s taking… it just kind of breaks your mind in some sense from 7 million years. And that was using, I think, 7.3 million GPUs. If you had access to them, using them all 24 hours a day, it’ll take 7 million years. And now our computers solve the same problem in two minutes. So it blows people’s minds when you hear that. So that gives you an inkling. And that was using our quantum computer. So it’s doing stuff that would have taken probably forever, 7 million years. So to solve. So you can kind of say quasi kind of intractable problems solving that into something that’s tractable in terms of two minutes, but it’s using the laws of quantum physics. So that’s how the chips are operating there. They’re operating at the quantum level. We’re using light or photons, and we’re using certain properties of quantum physics like interference, superposition, entanglement to really achieve these outrageous speedups.

Colin Ryan: You mentioned photonics, which I want to come back to. But just quickly on on the math problem, I think that’s a misconception that although utility scale quantum computing is several years away, you’re running quantum computing calculations today. There are working quantum computers today just on a smaller scale.

Christian Weedbrook: That’s correct. So we have quantum computers today. So do others in the industry. They’re solving some remarkable things, like the example I gave before. The challenge now for us and others to scale up to a larger size quantum computer. It’s at that point where you can start seeing important 7 million years down to two minute discoveries and speedups for important things like drug discovery, material design, and you need a larger quantum computer to do that. So we’ve been very vocal. We’re aiming for 2029, 2030 to do that. It’s still a stretch goal, but it’s possible. And that’s how we try to live our lives particularly I think, all start ups try to do that. And so we’ve hired some really amazing people, continued hiring. We’ve hit pretty much all of our major hardware milestones in the past. So we’re quietly confident of hitting that large scale quantum computer by 2029, 2030.

Colin Ryan: That’s great. So back to photonics. And that’s the modality that you’re using to build your computers. There are other modalities like superconducting circuits that folks like IBM and Google are using. What are the pros and cons of photonics versus some of the other modalities. And why did you select photonics as your modality?

Christian Weedbrook: Well, there’s a you can, I guess, say that with photonics we saw the light. Where do I look? Is there anywhere I look?

Colin Ryan: That’s a good one. I’ve got one for the end to good.

Christian Weedbrook: Okay, great. Thanks. So I would say photonics was chosen because of its benefits. Now, I will say at a high level that we think will be one of the winners to achieve this large scale quantum computer. But there will probably be a handful, meaning there’s a lot of good approaches out there. All of them have pros and cons. As you can imagine, the pros for us is room temperature computation. It’s one of the huge benefits there. Another one is we can use preexisting large scale, high volume manufacturing foundries. And we can also leverage off the shelf components like lasers and fiber optics. We didn’t have to invent or build them ourselves. And the final big benefit is the network ability side of things. The ultimate model for us and others is to build a large scale quantum computer, which actually means on the ground you’ll have hundreds of smaller quantum computers, call them server racks or whatnot that are network together using light. We’ve already achieved that on a sort of MVP or smaller scale. No one’s achieved that before. So there are the benefits. The challenge is the errors that quantum computers produce. That’s true for every approach. Now depending on how you build it, the error kind of manifests or comes out in different ways. For us, because we’re using photons, it comes out through loss. So whenever you shine a laser, either through free space or on a chip, not all the particles of light, the photons make it from start to finish, and this is loss. And so we have to be able to correct that, adapt to that, and so forth. And so us and others in the industry will use error correction to compensate for any errors that are caused, in our case by loss.

Colin Ryan: So you talked about, I think a large scale quantum computer. It’s the vision for Xanadu… Like, are we all going to have quantum computers at our desktops in our, at CIBC’s offices, or are you going to offer a data centre and sort of quantum as a service? Like what does a business model look like?

Christian Weedbrook: Yeah, it depends on what time frame. So definitely our first product will offer quantum computation as a service over the cloud. Two models for that: we’ll build our own data centres. Hopefully the first ones will be here in Toronto in Canada. And then we’ll also be able to offer the the building blocks, the server racks itself to other on prem sort of customers. Beyond that, though, we see no reason why you cannot have a quantum computer on your phone or on your computer, or on your desktop. The laws of physics don’t forbade it. But the question is, when can we get to that miniaturization part? So that’s still TBD. And we have enough on our plate building this first earlier model.

Colin Ryan: And I guess the reality to like quantum computing is not going to be necessary for everyday computations. Like in some ways it’s going to be too powerful for a lot of everyday uses.

Christian Weedbrook: Yeah, it’s hard to see why you’d use a quantum computer to load social media faster. It’s already pretty fast. Having said that, with most technology is really hard to predict what you’ll end up using it for. You know, the internet in the early 90s was really hard to see where it became today. So we don’t rule out any options. And I think like artificial intelligence, getting the quantum computing in the hands of users, hopefully they’ll be discovering stuff that we just can’t imagine. So who knows what it’ll be used for. But the early sort of belief today is quantum chemistry, material design, drug discovery, logistics, finance, AI will be severely disrupted by quantum computers.

Colin Ryan: So the last thing on the company, another unique aspect of Xanadu is Penny Lane, which is an open source software. It’s the leading quantum, programable quantum software that’s used across the industry, not just by Xanadu’s customers. About 50% market share. Why? Why develop Penny Lane, keep it open source, and then maybe where’s the fascination from the Beatles come from as well? I know you’ve got a lot of Beatles theme names across your company.

Christian Weedbrook: Yeah, I love the Beatles. It’s that simple. So it’s always good to take from your love of things and bring it into something like a startup. So Penny Lane is a great example of that. We started Penny Lane. We were one of the first quantum software packages anywhere in the industry, and definitely the first when it came to quantum machine learning or quantum AI. So that was kind of we had a great product. And back then there’s things like TensorFlow, PyTorch, IBM started Qiskit, they were all open source. We came from academia. So we like our open source. But fundamentally the more… the lower you can sort of reduce the barriers of entry. You know, if we are charging from day one, you’d make some revenue. But the key thing was building the user base. And that was the idea of keeping open source. We’ve always said that, you know, it’s following the road of open source. You can always monetize it. We haven’t done that yet, but it’s always a possibility. Traditional things are support and services plus tiered levels, say an enterprise level. So all of those things are on the table. But yeah, as you said, it’s one of the most widely used software offerings anywhere in the world. The idea for people that are listening is like any hardware, you need to have some way of accessing or using the hardware, and that’s through software and in our case, through Penny Lane.

Colin Ryan: That’s great. That’s a good segue actually into financing and how you became public, because that was a big point as we marketed the company to investors. You know, CIBC and myself personally were very proud to partner with you on that and help

Christian Weedbrook: Did an incredible job too yeah, I think one of the largest in the quantum industry in terms of what we raised for the.

Colin Ryan: Very successful $275 million US. Yes, started out trying to raise $100 million, and more than 2Xed that. And a lot of excitement, is the first Canadian tech company to go public in four years. So it’s fantastic. A different route. But why go public now? And why choose the SPAC route versus a traditional IPO?

Christian Weedbrook: Well, we actually decided to what would have been start raising our Series D at that point, looking to raise, say, $200 million. It was going well, but to be honest, we saw what was happening in the public markets for the quantum other quantum companies at the time, and they were going really great. So we started thinking more. We knew we would have raised the $200 million. We’d been successful in the past, raising over $250 million in previous rounds. But it is a race. And so we thought, let’s look into this. And the others had done SPAC. So that was the natural sort of progression there. At the end of the day, as you mentioned, it was the right path for us because we raised $275 million in four weeks. And I still remember through through your introduction, among many of the introductions, the first day we sat down, someone said, “Okay, I’m going to write $50 million cheque.” It’s like, what’s happening here? You know, probably didn’t believe it. I didn’t believe it. Actually, I never believe it until the money’s in the bank. But that was that was crazy. And so they really validated the approach of going doing a SPAC and then raising the pipe and looking back on it, you know, a couple of months after going public, it was still the right decision. And we’re really happy that we work with you guys and went public.

Colin Ryan: Great. Well, yeah. Look, it was it was a big splash I think a lot of excitement. And we’re excited to see, you know, what you do as a public company now. Yeah. So that’s on the private side, private funding. There’s also a lot of government support in both the US and Canada for quantum computing. So let’s touch on DARPA, which I think is the most widely known kind of government adjacent funding for quantum sector. You’re in, you’re one of three Canadian companies that made it to DARPA, Phase B… Three of eleven alongside Photonic and Nord Quantic. You’re just just tell the audience what DARPA is, what the objectives are, and what it takes to kind of get to where you are today.

Christian Weedbrook: Yeah, DARPA has been around for many decades is, I guess, roughly speaking, the research and funding arm of the US government. They’re very well known also for many of the discoveries, a lot of technology and hardware discoveries of our lifetime and before that have come through government support or through DARPA programs. So it’s a privilege for us to be there. One of only 11. There was Phase A, obviously. I think it started off 19 or 20 companies. It goes up to Phase C and it’s up to over $300 million in total. So it’s been really good. It’s more and more people are hearing about it. It’s a very much a stamp of approval. It’s not the end of the world if you don’t get into subsequent phases. But it does help. And there’s also Canada. The Canadian government is looking into that as well and saying, “Well, we need to do our own Canadian version.” And so they announced last year Canadian Quantum Champions program, which us and three other Canadian companies are part of, very much mirrors what’s happening in the DARPA, what’s called the QBI program there. So it was great to see the Canadian government step up and step up very, very fast once they said they were going to do it.

Colin Ryan: And that was going to be my next question. So I’m glad you brought it up. You’re in the program. How has the you know, aside from that sort of funding, just sort of government support been for you specifically? And I think the quantum sector in general, because we do have a leadership position, I would say, you know, D-Wave obviously has made a little bit more to the US, but three of the 11 in phase B, including Xanadu, are doing tremendously well. Well, has the government been an important factor in that from your perspective?

Christian Weedbrook: It has. And something like quantum computing that is capital intensive and has the potential to change the world and create new industries and really help governments around the world is necessary for quantum computing. So yeah, it’s been particularly the US and Canadian governments. We’ve had previous DARPA projects as well paid projects. We’ve had tremendous support from the Canadian government in the past. Also, we have announced through the permission of the Canadian federal and provincial governments, we announced a few months ago press release that we have up to nearly $400 million in government funding coming from the federal and provincial governments. So we’re still working through the details and that hopefully we have something to announce on that. But yeah, it’s tremendous support, particularly from the Canadian government.

Colin Ryan: So maybe just one sort of more measured two more questions for you. You know, when you look at getting to that commercial scale utility scale by 2030, not just for Xanadu, but for the sector, what are the potential impediments or roadblocks you see along the way, whether that is funding, whether that is technical, engineering, etc.?

Christian Weedbrook: Both of those. You said it right. The funding is always a challenge for something like quantum, and something that, as mentioned, will change the world. Going public for us really minimize that. It’s still a risk. But that’s one of the reasons why we in public government funding will also help mitigate that risk as well. But technical achievements is all about the hardware. We’re fundamentally a quantum computing hardware company, and the intuition there is, if you can’t build these machines, the software doesn’t matter, the customers won’t come and all of that. So the ability to sort of continue hire the best people is really key. And we’ve done that in the past, and we continue to do that, particularly since going public. Going public helps us to sort of have money and legitimacy to keep, you know, hiring great people. So that continues to be the case. But I would say, you know, if we don’t achieve our hardware milestones, it’s always a possibility, like anyone building something tough, but we’ve always achieved it in the past, and having the funding and the talent to do that will only de-risk things as we continue forward.

Colin Ryan: Great. So the last one, you know, started Xanadu as a white paper at U of T, what do you what do you want the vision or legacy of Xanadu to be not from like a share price perspective or monetary perspective, but just as you fast forward 20 years, what do you hope the legacy of Xanadu is?

Christian Weedbrook: I never think about legacy questions. I’m just trying to wake up each day, okay, get through the day. But you know, and we’re not thinking beyond, say, you know, this quantum data center, if I have to think more about it is I hope it’s made a positive impact in Canada. I hope it’s it’s been part of the story that you can build things here in Canada for future generations. But I don’t really spend much time thinking about it. But that would be nice seeing others think that, you know, most of our funding through the private rounds have come from Canadian investors and Canadian leaders. So hopefully supporting others and giving them advice if they need it, and just trying to help build a bigger and greater Canada, I think would be great if we could do that.

Colin Ryan: Well, we’re all cheering for your success, Christian. Appreciate you coming today. And I promised you my joke. You had your photon light joke.

Christian Weedbrook: Yes.

Colin Ryan: So a quantum bit or qubit. So one day a qubit walks into a therapist office and lies down on the couch and complains. Nobody understands me.

Christian Weedbrook: That’s good. I like it, I like it, but I’ll think more about that if I truly understood it like quantum physics. But now, thank you for having me on CIBC’s Between Two Ferns, I appreciate it.

Colin Ryan: Thanks, Christian.

Christian Weedbrook: Thank you.

Colin Ryan: Thanks.

The Xanadu story: From startup to quantum powerhouse

The Xanadu story: From startup to quantum powerhouse

Colin Ryan

Managing Director & Head, Technology & Innovation, Investment Banking

CIBC Capital Markets