Thanks for joining us today. My name is Mark Lipacis. I'm the Senior Semiconductor Analyst at Evercore ISI. Very excited to have Matt Kinsella, who is the CEO of Infleqtion. For those of you in the room who are not living quantum every day, Infleqtion is the first publicly held neutral atom-based quantum computing company with a full stack strategy spanning not just the neutral atoms, but also quantum software, optical atomic clocks, inertial sensors, and quantum RF antennas. Matt has been involved in the company going all the way back to its days as ColdQuanta, participating in its seed round in 2019 and joining the company full time two years ago. Thanks for having me here, Mark. If I was to start off, when we started first doing work when I was on quantum computing, I have to say I was overwhelmed with the technology and the different lexicons, and if you could from a portfolio manager standpoint, there's six or seven quantum modalities. Yep. You're a neutral atom. Yes. Just to level set, how should investors think about the advantages of neutral atom versus the other modalities? Sure. I can tell you how I think about it today, and I can also tell you how I thought about it when I first invested in Infleqtion. I think that's great, because things are changing so rapidly. They are, yeah. Before I came full time at Infleqtion, as Mark said, I was the first investor in the company, and I was at a firm called Maverick Capital for 18 years and was a public equity investor, used to read your research all the time, and then helped start our venture capital effort in 2014 and then seeded Infleqtion, like Mark said. What I found so fascinating about the neutral atom quantum modality, or even when I say quantum, does everybody have an idea of what that means? It's like, yeah, sort of. We're, yeah, we're talking about the world of the very small, right? The atomic and the subatomic levels and the really weird quantum mechanics that rule the day down at those very small levels. They are very different than what we experience on a daily basis in our macro world. If you can take advantage of those weird quantum mechanical principles, you can turn them into useful products. That's what quantum is and why quantum matters. The reason why turning them into useful products matters is because they can do things that classical products can't do, or they can do things that classical products can do, but with orders of magnitude improvement over how those classical products do the job. When I was going down the quantum rabbit hole in 2017, I saw a lot of the different modalities. What I noticed was all of those modalities were really just good for one thing, and that was building a quantum computer. The range of things that you can take advantage of these weird quantum mechanical principles to build is much wider than just computing. You needed a very flexible underlying quantum technology to address those different types of use cases, and that is where neutral atoms really shines. It is the most flexible quantum modality. I met a professor named Dana Anderson, who was the founder of Infleqtion, and he was a professor for 40 years at the University of Colorado. You don't think of the University of Colorado as necessarily the premier academic institution, but for atomic physics, it's the best in the world. Dana left Caltech to go to Colorado as an upgrade. He had spent his life designing, basically pioneering neutral atoms. What I found so interesting about them at that time was that flexibility. We could build a quantum technologies company that wasn't just, do we get a useful quantum computer or not, but you could actually point this very flexible neutral atom modality at some more near-term applications like timekeeping, like antennas, like quantum sensing. We started to put the R&D in place to discover whether neutral atoms was going to be an interesting candidate for quantum computing. What I found so interesting back then was the flexibility. What I find so interesting now has been, and if I reflect back on the initial seed thesis, I had a pretty good idea that we could build a good quantum sensing company on neutral atoms, but it was unclear as to whether neutral atoms would be a great quantum computing modality. Today, what's been so interesting has been the progress that neutral atoms have made on the quantum computing front since we started investigating if they'd be good at quantum computing back in 2018. Really fast-forward today, neutral atoms, even though they're the new kids on the block, are winning in most of the metrics that matter to get to useful quantum computing. There's a lot to like about neutral atoms. The flexibility is one of them, the ability to monetize in the near term, but really the fundamental scaling ability of turning those atoms into qubits and then scaling those qubits up to the numbers of qubits that are useful to do calculations. Got you. On that topic, or just to extend from there, can you just talk about in the broad brush strokes how investors should be tracking you and your milestones and where are those opportunities to monetize along the way? Yeah. two probably most critical metrics to focus on for our company. One is revenue, I think that will show you can we execute on the commercialization of some of the more near-term quantum sensing applications. The other is logical qubits, which are really, in my mind, the only metric that matters for quantum computing. We have guided to at least $40 million in revenue this year, I would hold us to that. We've guided to hitting 30 logical qubits by the end of this year, our roadmap calls for 100 logical qubits by the end of 2028. I think if you focus on those two things, that'll make sure we know how to execute and sell our sensors in the near term and then continue to drive the R&D to get to useful quantum computing. Gotcha. I think from my standpoint, what's exciting is when we were doing the work, we plotted the qubit scaling against the transistor scaling. It's at or maybe even better than Moore's law. Double the transistor density. It seems like if you're going from 12- 30- 100, that may be even faster than that kind of transistor density improvements that we saw with Moore's law. That's- Is that a right way to think about this? I haven't seen that specific analysis, but I'd love to see it, actually. You said you used to read our research. Yeah. I'll make sure to get you- I would love to get back on the distribution list. Yeah, exactly. It intuitively makes sense to me because one of the reasons why it's hard to keep track of all the progress in quantum is because it does scale double exponentially, it would make sense that it's going faster than the exponential scaling of Moore's law. That has to do with the fact that as you add a new physical qubit to a system, just to differentiate physical versus logical, physical qubits are the physical manifestation of quantum bits, but in order to make them useful, you have to error-correct them, then take clusters of physical qubits and turn them into useful logical qubits. As you add another physical qubit to the system, that system scales not just exponentially, but because they're all entangled and they're all in superposition, you actually see a double exponential scale. It makes sense. You're talking about the computational horsepower. Exactly. The computational horsepower. The fact that that translates into a faster scaling of logical qubits mapped against Moore's law does intuitively make sense. I think that's maybe one thing that investors don't understand when they think about this industry. If I think about adding processor cores to CPUs, they've started to hit a law of diminishing returns. Yeah. It kind of scaled linearly until you get to four cores, and then it would level out. I think GPUs scale linearly with the number of GPU cores. Correct. Quantum scales exponentially with the number of qubits added, which is really exciting if you're adding qubits at the rate of Moore's law, the computational horsepower would grow exponentially faster. Exactly. That's exactly right. That's where the double exponential. It's hard to imagine the end use cases, I imagine, right? We can suppose about what some of the more obvious ones are, but I think we all have to be very humble, for lack of a better term, in knowing that use cases we haven't even thought of will become. Right probably the primary use cases for quantum computers. When we talk about getting to 100 qubits by the end of 2028, what are the long poles in the tent? What physics or science challenges have to be solved, and to what extent is that engineering? To get to 100 logical qubits, at the highest level, you need a lot of high-quality qubits. You need quantity and quality, and then you need good error correction software. To get to 100 logical qubits, we've solved the quantity piece. We have 1,600 physical qubits in our system. We have solved the quality piece. We are at 99.73% gate fidelity. Eventually we need those to be five nines, but at 99.73%, we're above the threshold where they're high enough qualities to get to 100 logical qubits. Now it really comes down to two things: controlling those qubits with better precision, and that's all done with lasers, and then improving the error correction software that we utilize. To get to 100 logical qubits, there is not really scientific breakthroughs that need to happen. It's engineering at this point in time. To go to 1,000 logical qubits and then 10,000 logical qubits and beyond, we are still in the realm of engineering, but some science that needs to take place, and then scientific breakthroughs can accelerate that whole timeline if and when they happen. Got you. If you think back to when did quantum computing go from if to when, it was really still pretty speculative until late 2023. In late 2023, neutral atoms showed logical qubits for the first time. It was the first time anybody had created a logical qubit on planet Earth. Until we could prove that you could go from physical qubits to useful logical qubits, it wasn't certain that quantum computers would eventually be useful. We've passed that kind of binary threshold of going to zero to one logical qubits, and then we did 12 last year, we'll do 30 this year, and we'll do 100 by the end of 2028. That, to me, was the big change from if to when these got useful. We're talking quantum mechanics and qubits, and it can be abstract for a lot of investors as they try. Yeah. Can you drive it down to on a concrete level, what near term are the applications where you're getting the $40 million in revenues from? Sure. To what extent is this hitting milestones with government programs or versus commercial applications? How to think about that. I'm sorry I didn't do it this time. I usually will bring one of our quantum chips with me to make it more real, but I left it back in Boulder. Unfortunately, when I take them on the road, I usually break them. It's like I'm destroying some of our capital equipment by taking them on the road with me. I would imagine I'm holding a quantum core in my hand, and it looks kind of like a chip, but it also sort of looks like a vacuum tube. Like a little bit of a vacuum tube chip. It's about that big, and inside that chip live atoms. In our case, we use rubidium or cesium atoms. All of the products that we make are fundamentally using lasers to control those atoms that reside inside that core and taking those quantum mechanical properties and turning them into products. We build clocks by exciting the atoms and taking the energy transition of the outer valence electron, and that energy transition It's one of the weird things of nature, the most stable frequency reference there is out there. You can create the most precise, fastest ticking clocks on planet Earth by manipulating the atoms in that way. That's where a lot of the revenue comes from today. Some of those more near-term sensing applications, clocks being one of them, where you can just run a replacement cycle on the existing precision clocks that are out there with clocks that are 1,000 times more precise. We also build antennas very similarly. Instead of using that transition of the electron as a frequency reference, if we can put that electron way out in orbit, think about if the atom looks like the solar system, this is now Pluto, that atom now becomes an antenna. It has magical receptive properties where you can receive the entire electromagnetic spectrum with extreme precision. You don't need huge antennas to receive low frequency, long wavelength signals. You can receive them in something very small. That's a very interesting use case for both military and commercial applications. That's a lot of the monetization today. We are sending our quantum gravimeters into space alongside NASA. They're our biggest customer right now. A quantum gravimeter? Gravimeter, yes. Okay. And so- There's a whole new lexicon. It's a whole new lexicon. Yeah. There are classical gravimeters in space today that are sensing changes in gravity on the Earth's surface. Okay. You can infer interesting things by changes in gravity. It could be the melting of polar ice caps. It could be the depletion of aquifers underneath the Earth's surface. It could also be the building of facilities underneath the Earth's surface. Anything that fundamentally changes the mass underneath the Earth's surface is interesting information to collect. Quantum gravimeters can do that with call it 1,000 times more precision than you could with classical gravimeters. That's what we're working with NASA to send into space right now. There's a few of the applications that are outside of the computing realm that are useful today, that we are monetizing. We've also sold three quantum computers as well. That's in the revenue mix, too. Got you. Okay, there was news a week or two ago, you signed a letter of intent with the Department of Commerce to receive $100 million. Yes. What is the money earmarked for? Maybe before that, what does this mean that the government is funding you? I think you were the only neutral atom company that got funding. There were two neutral atom companies. Two, okay. There was a private neutral atom company and then us. Got you. Mm-hmm. If you go back to October, November of last year, the Department of Commerce put out a call that basically said they were redirecting some CHIPS Act money to fund some fundamental technical areas that the U.S. had to maintain competitive advantage in. It broke down into photonics, chips, and quantum. They basically said, "Okay, all quantum companies across the globe, show us what you have and tell us about what you can do." They worked alongside NIST, which is the National Institute of Standards and Technology. Some of the smartest human beings in the world work there. They did a deep technical overview of basically every quantum company. They down selected to a small number of companies that they wanted to partner with going forward. The interesting thing is that this was a more broad call than just quantum computing. It was actually quantum sensing plus quantum computing. We put in proposals for both. Originally, I had thought that the Department of Commerce would skew more towards quantum sensing because it was more near term. One of the interesting takeaways from this is I believe they effectively saw what everyone was doing in quantum computing across all companies and came to the conclusion this was more near term than they had historically thought. What they've done is they've down selected the companies they want to work with, funded the milestones that we've told them we need to get through to get to useful quantum computing, and allocating that $100 million to the achievement of those milestones to get to those useful quantum computers as fast as possible. I think to me, there's a lot of interesting things embedded in what just happened. One, the U.S. government declaring quantum mission critical for the country. Two, coming to the conclusion that quantum computing is sooner than they had historically thought. Three, having done a very deep technical overview of every quantum company out there and then down selected the ones they've wanted to work with. The government is taking a stake? They are. It's not your just a traditional $100 million grant. There is, in exchange for the $100 million, they're investing in the company, basically. Got you. Okay, we're running up on time. We got a couple of more minutes. I think, when you read the news stories on Infleqtion, NVIDIA comes up, obviously an incredibly important company, right? Yeah. It's nice to be aligned with them. Can you tell us what's the relationship between you and NVIDIA? Sure. They have an unbelievable quantum team. What they're doing for quantum, to me, is very smart, especially based upon what their core goal in life is, which is to sell more GPUs. I know that the company believes that as quantum proliferates into the world, that provides them with an opportunity to sell more GPUs. What they're doing is focusing on a couple of things. Their most recent announcement, the Ising models, were really how do you use AI to accelerate the time to useful quantum computing? A lot of that has to do with error correction. The detection of errors within a quantum computer is actually a quantum process, but tracing those errors back to their causes is a process that AI can do pretty effectively. Using their models and tweaking them to our specific computer has helped us accelerate our error correction. The other thing that they've put out into the world is called NVQLink. That is linking GPUs and quantum computers together so that they can work together to solve hard problems. That's where I believe they think their opportunity to sell more GPUs comes into play. I don't think QPUs, quantum processors, are going to replace GPUs at all. I think they'll work hand in hand to solve a whole range of problems that we just haven't been able to, nor ever will be able to solve with classical computers. At the end of the day, the most powerful GPU cluster is boiling things down to zeros and ones. The problems of nature really can't be boiled down to zeros and ones because that's not how nature works. That's a heuristic for how the world works or how the universe works. If you want to try to model how molecules are going to come together and how the electrons in those molecules are going to come together, that's a quantum mechanical process that would take 1 trillion years for a classical computer to try to model. Quantum computers can do those because they exist and compute in the same way that nature does. That will then open up that class of problems for compute to be thrown at, but quantum computers aren't going to be able to do it on their own. They'll have to be done with GPUs. NVIDIA's trying to get quantum computing useful as fast as possible and then connect GPUs and QPUs to solve those really hard problems. There's a synergism between quantum computing and GPUs, like we've seen more recently between CPUs and GPUs. Exactly. I think that's how you'll see the data center play out in the future. Just like GPUs have been layering into the CPUs that already existed in the data center, we'll see QPUs layer in on top of CPUs and GPUs just to open up the types of problems we can solve, and we'll send workloads into the data center, and it'll get partitioned and sent to the part of the stack that is most appropriate for that problem. We won't even care if it's quantum solving this. It just is something we couldn't have done before. Outstanding. I think that's going to have to be the last word. Okay. Matt, thank you for joining. Thank you, Mark. Thanks for the great insights. Yeah. Appreciate it. It was a lot of fun. Yeah. Thank you. Good stuff