Q3 2024 Rigetti Computing Inc Earnings Call
We believe superconducting cubic's, how many advantages over other cubic modalities.
Including that they are fabricated using well established semiconductor design and manufacturing techniques.
Superconducting Cubic's also perform faster to get operations than other cubic mortalities.
Our system gait speeds consistently achieve an active duration of 60 to 80, nanoseconds, which is four orders of magnitude faster than other modalities, such as iron traps and pure idose.
System speed is an important factor to enable hybrid computing with current Cpus and Gpus.
After spending years optimizing the performance of our larger scaled 84 cubic uncut chips and honing our multi chip scaling technology.
We had manufacturing 90 with chips at 99, 4% median two qubit gate facility.
And then Q2 of this year, we demonstrated tightening of 90 <unk> chips without deterioration in performance.
We believe the anticipated full chip 36 cubic system will be the most ambitious multi chip GPU architecture in the market and a significant milestone for the company and the quantum computing industry.
Our approach to scalability mirroring multi chip architectures for advanced applications with Cmos is supported by our recently announced alternating bias assisted a meeting or a technique for precisely targeted cubic frequencies.
It'd be a allows us to consistently manufacture high performance Gpus.
With the frequency precision necessary for high facilities.
The combination of our a b a technique and a multi chip architecture is the cornerstone of our scaling strategy as we move into developing higher pubic current systems.
In addition, quantum error correction will be essential to achieve the accuracy needed for quantum computers to realize their full potential.
Together with River Lynn, we are working to advance our understanding of how to build fault tolerant quantum computers using quantum error correction technology.
Recently, we published a paper with river lame duck demonstrates how integrating that erode Lynch quantum are deepwater into the control system of our 84 cubic encore two system enabled achievement of real time, low latency automated correction a critical process for developing fault tolerant quantum computers.
We believe that our 90 day <unk> is ideal for experimentation across a variety of research areas.
<unk> qubit characterization and hybrid quantum algorithms.
We are excited to share that <unk> has been co located at the Israeli quantum computing Center IQ OCC with Quanta machines, RPX 1000 control systems, and Nvidia is Grace Hopper Super Chip Star Wars, which was made available to partners for research and experimentation.
The setup was recent deleverage for a reinforcement learning project, which was presented at <unk> 2024 in September.
The demonstration Intel optimizing single qubit operations under Nevada, <unk> and.
It is an exciting use case for using elevate our GPU for quantum machine learning development.
Finally, the Uk's national quantum computing center or <unk> officially opened the doors of its landmark facility on hardware campus. Our October 'twenty, one 'twenty 'twenty four.
The facility will support World class quantum computing research and provide state of the art laboratories for designing building and testing quantum computers.
The state of the art facility in Tulsa are fully operational in 2004 tier bid on got class system that will be made available to Ntsc researchers for testing benchmarking and exploratory applications development.
In summary, I'm excited about our 2025 roadmap and progress on the technology front.
We believe the combination of our AIA technique and a multi chip architecture will serve as the cornerstone of our scaling strategy as we move into developing higher qubit called systems, which includes utilities.
Speaker Change: Thank you Jeff will now make a few remarks regarding our recent financial performance.
Speaker Change: Thanks Sue boat.
Jeff: Revenues in the third quarter of 2024 were $2 4 million compared to $3 1 million in the third quarter of 2023.
Jeff: Revenues, an important part of our strategy to fund our ongoing research initiatives, we have added to our sales and marketing staff and have expanded our lobbying efforts to help grow our revenue in the future.
Jeff: Gross margins in the third quarter of 2024 came in at 51%.
Jeff: Compared to 73% in the third quarter of 2023.
Jeff: Revenue and gross margin variability is to be expected at this stage of the company's evolution, given the variable nature of our contract deliverables and timing with major government agencies.
Jeff: In addition, our recent contract to deliver a 2004 qubit quantum system has a lower gross margin profile than most of our other revenue.
Jeff: On the expense side total opex in the third quarter of 2024 was $18 6 million compared to $19 1 million in the same period of the prior year.
Jeff: The year over year decrease in total Opex was primarily driven by $1 1 million of expense recognized in the third quarter of 2023 for the Amp here forward agreement, which expired in October 2023.
Jeff: Stock compensation expense for the third quarter of 2024 was $3 4 million compared to $3 7 million for the third quarter of 2023.
Jeff: Net loss for the third quarter of 2024 was $14 8 million or <unk> <unk> per share compared to a net loss of $22 2 million or <unk> 17 per share for the third quarter of 2023.
Jeff: The noncash change in the fair value of derivative warrant and earn out liabilities favorably impacted our net loss for the third quarter of 2024 by $2 million compared to a negative impact of $5 $2 million in the comparable prior year period.
Cash cash equivalents and available for sale investments totaled $92 6 million as of September 32024.
Jeff: During the third quarter of 2024, we raised $12 million from the sale of $11 3 million common shares under our current ATM program.
Jeff: As of September 32020 for up to $60 2 million of common stock remains available for sale under our current ATM program.
Jeff: As disclosed in today's 10-Q filing we believe that our existing balances of cash cash equivalents and marketable securities should be sufficient to meet our anticipated operating cash needs until midway through the first quarter of 2026.
Jeff: On our current business plan and expectations and assumptions considering current macroeconomic conditions.
Jeff: Thank you we would now be happy to answer your questions.
Jeff: Thank you ladies and gentlemen.
Speaker Change: Just a question you may need to press star one on your telephone and wait for your name to be announced to withdraw your question simply press Star one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: And our first question coming from the line of David Williams with the Benchmark Company. Your line is now open.
David Williams: Hey, good good morning, and thanks for taking my question first I guess, congratulations to you and the team on all the continued progress and some of it. It sounds like you have increased confidence here in the roadmap and just the ability to achieve the targeted fidelity's, while continue to drive that cubic.
David Williams: Cuban scale count but.
Speaker Change: Yes, I'm curious has anything changed in the way that youre thinking about the roadmap and maybe the strategy and it feels like just maybe some of the progress, especially on the <unk>.
Speaker Change: <unk> is moving moving out a really nice clip here. So just anything that you think is outpacing the cadence that you thought you did.
Speaker Change: Are you anticipating maybe earlier.
Speaker Change: Yeah. Thanks, David Yes, Indeed, as you correctly said our confidence in our roadmap is increasing.
Speaker Change: As we disclosed we are making very high quality nine cubic chips median on one cubic gigabit entity of 99, 9% to cubic extremity of 99, 4% we have high confidence in their drive those numbers up going forward.
Speaker Change: We have demonstrated now that began tile 90 of our chips without any deterioration in performance.
Speaker Change: And that continues to be extremely at high speeds as you saw a 60 to 80 nanoseconds.
Speaker Change: So we have pretty high confidence that began start I think 90 bps and Thats why we said we returned 490 <unk> chips should get is 2006 cubic with incredible gait speeds and securities in the mid 90 nines.
Speaker Change: And then maybe at the end of next year and we'll continue to add that after two delivered 100 gigabit.
Speaker Change: Thank you Victor Tightenings plan and then eventually the light or the 236.
Speaker Change: So with all our confidence is pretty good that we will be able to execute this roadmap our confidence in superconducting continues to be very high.
Speaker Change: Particularly because of the high speeds.
Speaker Change: We still think superconducting is the only way to really have a hybrid computing that chemical existed Cpus and gpus compared to other modalities the speeds become what he had a detriment. So what else do you feel pretty good about our roadmap and execution.
Speaker Change: Our loans.
Speaker Change: Right.
Speaker Change: Fantastic great to hear.
On the other side you had mentioned again the timing of the nine qubit chips and no performance deterioration, but were there any other metrics that were perhaps better than expected or other areas, where you can do you see further improvements.
David Williams: David perhaps.
Speaker Change: And then thirdly.
Speaker Change: V V are learning Tiding chips, we have just we did our first starting a couple years ago with 40 cubic chips.
Speaker Change: In the figure that is very much Noah.
Speaker Change: Now we are getting that mid 99 sponsor to their EBIT and thank you for the chips. So it was important to be demonstrated again that we can.
Speaker Change: Chipset this.
Speaker Change: I figured it without losing any any facility.
Speaker Change: What is fascinating to me is that you can buy chips.
Speaker Change: Ross.
Have cigarettes communicate across into also sensitive maintain entanglement.
And all the critical metrics that we care about fidelity gauge speeds.
Speaker Change: Secretary metrics as well so overall, indeed does work and we feel pretty good that the right way to go about scaling.
Speaker Change: The beauty of Thailand chips is fundamentally.
Speaker Change: We are taking advantage of all star Chip led technology that has been pioneered by the Cmos industry. So we definitely get a huge leverage Cmos industry and all the work that we have done in and dialing Cmos ships.
Speaker Change: Certainly put some higher pressure on packaging.
Speaker Change: And testing and measurement.
Speaker Change: One has already been done by the Cmos industry. So they can leverage all of that work very nicely.
Speaker Change: You had a good about dialing chips.
Speaker Change: Okay, Great and maybe just one more if I if you don't mind, but just wanted to ask him that the government funding opportunity I thought. It was interesting you had talked about maybe spending a little more money there on lobbying efforts.
Speaker Change: One of your peers has done but how do you think about maybe the.
Speaker Change: Areas of opportunity for funding is there anything out there that you see today, but you've got a good shot at or anything maybe just any updates around the government funding. Thank you.
So certainly.
Speaker Change: Look at the U S government as the main place to fund artwork.
Speaker Change: In Q I know originally.
Speaker Change: Signed in 2018 has expired.
Speaker Change: Go ahead, he authorization hasn't been signed yet and that certainly has impacted.
Speaker Change: Near term financials, including <unk>.
And for the next quarter or two.
Speaker Change: Thank you any authorization is site.
Speaker Change: We are pretty confident there's bipartisan support for the AT&T authorization to get signed and it will be signed.
Speaker Change: I assume so.
Speaker Change: The new administration is in place.
Speaker Change: Regarding other Dodie has some special projects that our daughter power project.
Certainly sizable almost $300 million over seven years.
Speaker Change: That we are.
Speaker Change: Trying to get part of that award.
Speaker Change: Award and then are there opportunities to buy.
Speaker Change: Right.
Speaker Change: There are multiple opportunities between <unk> and <unk> and we are spending more time and effort, including some effort to trying to get some of that money.
Speaker Change: Thank you.
And our next question coming from the line of Quinn Bolton with Needham <unk> Company. Your line is now open.
Speaker Change: Okay suburban Jeff wanted to follow up on.
Speaker Change: David's question, just on sort of the I guess change and roadmap to now focus.
Speaker Change: Near term more on tiling, then kind of move into larger single chip Kievit processors.
Speaker Change: I guess, what's what's where do you see sort of the balance between.
Speaker Change: Single chip processors, and the number of titles ultimately you might put in a system based on the work you've done do you think you'll as you look forward 200 cubic.
Speaker Change: Plus keep it systems.
Speaker Change: <unk> larger.
Titles become important.
Speaker Change: Do you now think that you could tie all 16 or 25, these lower qubit processors and that might be a more efficient way to maintain gateways and fidelity.
Speaker Change: Gail Keybanc count.
That's a good question.
Speaker Change: B.
Speaker Change: Completely sure exactly what the optimal size of the cubic to count is actually tissue Tyler I mean, we certainly are choosing nine qubit right now because we have a very good 90 cubic high fidelity chip ready.
Speaker Change: This certainly explore adult qubit comes to look at tightening as well over time, but right now there's no reason not to tie into their chips.
Speaker Change: Seen good reserves.
Speaker Change: And then thank you my Chili's basically six millimeter by six millimeter. So you can do the math and see that relative content.
Speaker Change: Density.
Speaker Change: Aerial density.
Speaker Change: Can get tens of thousands of clearbridge, even hundreds of thousands of cubic's in a practical.
Speaker Change: Dimension of like 15 centimeter by 15 centimeters.
Speaker Change: And that can fit into a dilutions refrigerator fairly easily so we feel pretty good that even named cubic dialing can take us.
Speaker Change: Quite high certainly if increase aerial density by a factor of forward, which is not that difficult to begin squeezing a lot more so.
Speaker Change: That's why we decided to start dialing nine.
Speaker Change: Over time, if we find that Theres, a better optimal number where we can tighten this kibbutz.
Speaker Change: We will certainly take a look at that.
Speaker Change: It's as I mentioned earlier I mean, we.
Speaker Change: We certainly get the highest bid comes in your diluted chips.
Speaker Change: We haven't really seen any loss in any kind of critical metrics stability.
The secondary or tertiary metrics that we monitor so no reason not to dilute. It. This is the right way to do it is the only truly scalable Lee I mean, certainly.
Speaker Change: We ourselves are increasing the <unk> count on a bigger to chip.
Speaker Change: Some of our competitors are doing that as well and.
Speaker Change: And it's not really to keep building, a bigger and bigger chip and maintain the quality across the whole chip.
Speaker Change: The huge advantage and that's why the Cmos industry has standardized on the chip that technology you can.
Speaker Change: Literally thousands and tens of thousands of these small cube chips.
Speaker Change: At a high yield.
Speaker Change: And then.
Speaker Change: You can pick and choose.
Speaker Change: The best of those chips and tying them together, that's exactly what's going on in the Cmos industry Dana India also though so the 10 nanometer and find out are we going to see most north which are harder to make.
Speaker Change: They choose a smaller trial size what exactly the same reason of IVF choosing nature of it. So we are essentially leveraging what the Cmos industry has learned over the years.
Speaker Change: We plan to take advantage of that.
Speaker Change: Hopefully that answers your question.
Yes.
Speaker Change: I appreciate the color it sounds like tiling is certainly increase didn't in terms of its importance in your road map.
Speaker Change: Looking forward. So so I appreciate those comments I guess the second question is.
Speaker Change: You've had your sight set on a 99, 5% keep at fidelity now.
For some time.
Speaker Change: How much higher above 99.5, do you think you need to get Covid fidelity or when perhaps more importantly, do you start to pivot.
Speaker Change: Quantum error correction you had the announcement with river lane on quantum error correction.
Speaker Change: This quarter and so once you get 90 95 do you start to pivot, especially as the cubic counts go up on your multichannel approach.
Speaker Change: Does does.
Do you start to then focus more attention on quantum error correction or when do you think quantum error correction start to play a bigger.
Speaker Change: Roll in your in your road map.
Speaker Change: Well, it's already starting to show up as we announced with river laying them in dollars 90, British at 99, four right now and that's a good place to start doing interconnection, which is why we are working with rewards and acknowledged.
Speaker Change: Shove somebody.
Speaker Change: Good proof of concept of Javier correction works in real time at the gate suites, we are running at.
Certainly we will continue to push for annuity theirs.
Speaker Change: What is the.
What is the mix of luxury beauty I mean, as you know Cmos industry right. Now is between 49 stores six line, sometimes even higher fidelity, but they continue to improve it and that's the semiconductor industry is and we will go the same route.
Speaker Change: We are effectively two lines beginning to approach three nines that said we are collectively in the superconducting side, but that's not going to stop I mean, there's onesie.
Speaker Change: <unk> in the next three to five years vehicle for the 49 said, so but to answer your question.
Speaker Change: <unk>, two <unk>, which is 99 five.
Speaker Change: The nation starts becoming reasonable.
Speaker Change: Can start getting value out of your system from a practical standpoint, and we think that's why we think narrow corridor, which we define us.
Speaker Change: Taking practical applications and demonstrating superiority in performance art.
Speaker Change: Cost.
Speaker Change: Is that is achievable in the next year or two years.
Speaker Change: A couple of hundred cubic's with the mid 90 nines type.
Speaker Change: Utility interconnection interconnection Bottomline integration is already starting to starting to play a role in the Big 90 days and certainly as we increase further date becomes more and more important so it's already Huron.
Speaker Change: Got it and then a quick one for Jeff.
<unk>, the <unk> <unk> contract being a.
Speaker Change: Lower margin.
Speaker Change: Contract for you now that the 24 bit <unk> has been.
Speaker Change: Installed at the end QC is that contract largely over in that gross margin overhang kind of now in the rearview mirror or are there still revenue to be collected under that and QC contract that we should just be thinking about as we model gross margin over the next couple of quarters.
Speaker Change: Jeff.
Speaker Change: So to answer the question.
I don't know if Jeff is having a problem, which is audio stream, but to answer. Your question. We expect to see contract to continue to the first quarter of 2025 and at that point and just to see current contract.
Speaker Change: And we are working on a new contract with them, but the terms of that and not been decided yet.
So the current margin challenges continuing through Q1 'twenty identify it in GCC.
Speaker Change: Got it thank you so much.
Speaker Change: Yes.
Speaker Change: Thank you.
Our next question coming from the line of.
Speaker Change: Chris <unk> with TD Colin Your line is now open.
Speaker Change: Hi, Yeah. Good morning. Thanks, so much for taking my questions. This is Steven calling on behalf of Krish <unk>.
Speaker Change: Maybe if I could ask a couple more questions on the.
Air correction of error correction front.
Speaker Change: In terms of the.
Speaker Change: Progress with Ruger Lane during the quarter, just kind of curious what's the next major development milestones might be in terms of collaborations with <unk> and also kind of related to that.
Speaker Change: Error correction.
Speaker Change: The work that Nvidia and <unk> machines are showcasing with your system.
Speaker Change: Yes.
Speaker Change: I think some of the research will be published and also that the system is now installed at <unk> is really quite a compute center just kind of curious for that work does that tie in.
Speaker Change: With.
Speaker Change: We will be doing with <unk>.
Related apparel effort at more tightened more too feeding back to you.
Speaker Change: Fundamental.
Speaker Change: One of the places in town that tuning its performance to get better.
Speaker Change: Repeatable fidelity rates.
Speaker Change: Sure so yes.
Speaker Change: Two separate questions here first let me take the Nvidia question. So.
As you saw in our press release.
Speaker Change: We are collaborating on.
Speaker Change: With Nvidia at basically the quantum computing center.
Speaker Change: And really the goal is trying to understand from a fundamental standpoint Ho <unk> Yoo interfaces with the CPU and GPU.
Speaker Change: And there isn't that would've been extremely important for us as well as the whole industry.
Speaker Change: And really that highlights the importance of superconducting quantum computing, because we are dealing with tens of nanoseconds gait speed of beef.
Speaker Change: Can actually talk to modern day, CPU and GPU and keep up.
Speaker Change: The data flow.
Speaker Change: Other modalities like trapped ion on fewer items, although they have the benefit of slightly high fertility and they'd be outright now they are Florida orders of magnitude. That's 10000 times slower than where we are so from a practical standpoint. It really is not possible for adapting on auto pure item quantum computer to.
Speaker Change: Ste.
Speaker Change: In active communications loosely CPU or GPU and Thats why the work that <unk> doing along with Nvidia Gpus, the Grace Hopper GPU and <unk> is so important for everyone to understand the pros and cons of GPU versus GPU and how the data bifurcation should be done so that work is critical.
Speaker Change: Long term, that's what hybrid computing is all about and we are absolutely committed to doing that and to understand how quantum computing fits into the broader data center hybrid computing ecosystem.
Speaker Change: So that's one regarding the error correction I mean theres a lot of work to do readjust getting started if you look at it.
Speaker Change: The Cmos industry, ATA or just the classical semiconductor industry.
Speaker Change: There's been a lot of error correction vertical over the last couple of decades.
Speaker Change: I don't want to.
Speaker Change: Simply put it in a couple of sentences year to because you need to really go into the details of all of them, but right. Now we are talking about in the Cmos industry 700, 800 error correction core and then our video steps that happen to get to that level.
Speaker Change: And I expect us in the quantum computing density yet another complication, because we are getting the coupling of care beds.
Speaker Change: So it's not a simple.
Speaker Change: Situation that if there's a R. D. Cmos transistors, you try it again and again.
Speaker Change: The agribusiness multiple cups.
Speaker Change: <unk> Sandy from Uncoupling us back doesn't mean, the same cubic coupling with other people, which may be bad.
Speaker Change: It's a little more complicated as to how you do quantum interconnection and that's where we are partnering with you would've been who is an expert in many of these areas.
Speaker Change: You can certainly take a look at that website and what they have disclosed already in terms of roadmap, but there's a lot of work going on in the industry right now is going to matter in connection and how it differs from classical data collection, and what we need to be worried about and.
Speaker Change: And how is it roadmap has evolved from our standpoint, certainly the better quality hardware to begin bank, which is higher fidelity faster gait speeds and.
Speaker Change: And other metrics that really helps.
Speaker Change: So we need to do our part correctly.
Speaker Change: But on the quarter my recollection, they certainly need to take advantage of the hardware and to take full capabilities of the software layers that they do.
Speaker Change: I hope that answers your question.
Speaker Change: Yes that does thank.
Speaker Change: Thank you for that.
Speaker Change: And I.
I guess for my follow up I, just had a question for.
Speaker Change: Jeff on the P&L in terms of operating expenses.
Speaker Change: Given the comments on higher sales.
Speaker Change: Sales and marketing spending lobbying efforts and then also looking ahead.
Speaker Change: With all the efforts on the <unk> in 36, Q monitoring system for next year.
Speaker Change: Any thoughts on weather.
Speaker Change: Whether we should be modeling for the quarter, the opex to be closer to that 2000 $19 million to $20 million range or could it be higher than $20 million per quarter for tropics.
Speaker Change: Are you able to hear me yes.
Speaker Change: Yes, we can alright.
Speaker Change: Alright, I don't know why I had a technical difficulty before.
Speaker Change: I think we will see.
Speaker Change: A significant increase in Opex going forward, we are planning for a.
Speaker Change: Handful of new hires over the course of the next year.
Speaker Change: And.
Speaker Change: As we had noted we are starting to spend some more on sales and marketing, but I don't think it will be.
Speaker Change: Significant term material.
Speaker Change: So I would expect.
Speaker Change: Our opex.
Speaker Change: Remain in line or slightly higher than what we've seen.
Speaker Change: In the most recent quarters.
Speaker Change: Great. Thank you Jeff.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: And our next question coming from the line of.
Speaker Change: Brian <unk> with Alliance Global Partners. Your line is now open.
Great. Thanks for taking my questions.
Speaker Change: If the incoming administration is successful in getting the quantum initiative reauthorization past.
This lead to more government R&D procurements, I guess I am curious, how righetti might benefit in the short to medium term. If this does pass.
Speaker Change: Thanks, Brian.
Speaker Change: Absolutely the <unk> authorization Act that is being debated in Congress right now is critical for our funding in 2025 and the next two years.
Speaker Change: Right now there are multiple versions.
Speaker Change: The latest version.
Speaker Change: At least in the Senate has a significant increase in quantum funding at all.
Speaker Change: Originally <unk> was $500 million over five years the injury authorization at least right now the number that is being discussed is almost five times higher. So we are talking $2 5 billion over five years. So as you mean the injury authorization as fast at that level certainly it will help all quantum com.
Speaker Change: During companies based in the U S and certainly we expect funding.
Funding that we receive from places like flooding the lab in Oak Ridge National Lab billing.
Speaker Change: Substantially.
Speaker Change: In addition that I mentioned this earlier the department of Defense also does fund quantum computing through several different initiatives and there is a DARPA program for what they called benchmarking initiative that is a sizable program.
$300 million or seven years.
Speaker Change: So we certainly hope we can get some of that.
Speaker Change: Among those dollars that the U S government is planning on investing in quantum computing.
Speaker Change: Is slated to increase significantly they are talking.
Speaker Change: Forex five X increase starting 2025, and we certainly are looking forward to getting those bills authorized under appropriations done so they can start benefiting from that.
Speaker Change: Great. Thank you and then.
As you continue to improve fidelity rates you meet your roadmap goals and with the new news on tiling what are <unk>.
Speaker Change: Potential government customers Howard to reacting and are you, making any progress on some of the Rfps you've discussed in the past, maybe not specifically on which countries, but you've mentioned that you have a handful of rfps out there.
Speaker Change: No I mean.
Speaker Change: The customers, we talk to like the <unk> and some of the governments like the U K go to maintenance and so on the light like our tiling approach and the NBA and using B. They believe and we certainly believe that that's the right way to scale up to bid.
Speaker Change: It's easy to say you can keep increasing the size of the chip, but it's not trivial to bid hundreds and thousands of give itself.
One of the Tic chip that is styling is a lot more tactical that's why the Cmos industry does it and that's why between what's the right time to bring dialing in.
Speaker Change: So we certainly feel confident that's the right way to global doing it.
Speaker Change: Some of our competitors so far have not the insured in this area could be because we have a lot of IP in this area, but also maybe other factor herself.
Speaker Change: We certainly think tiling.
Speaker Change: <unk> is the right way to scale up to bid.
Speaker Change: <unk> intelligence of which over the next few years and we are committed to that so far we have not seen any negative impact and obviously, we see a lot of benefits and dialing in terms of scale up so we continue to push that one.
Speaker Change: Great. Thanks, and my last question is.
Speaker Change: Assuming you can continue to stay on your technology roadmap and reached 100 Kubitz at 99, five median fidelity.
Speaker Change: How if at all does this change <unk>.
Speaker Change: <unk> purchases for R&D purposes does it is it an impactful or do you think you start to see a little bit more.
Speaker Change: Adoption from other government labs.
Speaker Change: But as you may execute a roadmap and we feel pretty confident so let's say we are at 100 gigabit at 99, 5% begin to cubic capability by this time next year.
Speaker Change: Along with that as a correction that we talked earlier about I mean.
Speaker Change: Suddenly you start having a quantum computer that is capable of doing effectively about because I don't want to make arent age type application suite take some practical applications and demonstrate superiority.
Speaker Change: In terms of performance, our cost and Thats certainly an increased appetite for the U S government, but other governments to start doing more research.
Speaker Change: Quantum computing already the list of countries that that has a quantum mission and plans to invest in quantum computing is getting to be $1 off.
Speaker Change: 15, or maybe even 20 countries now and.
Speaker Change: When they see that we are becoming more and more practical in terms of.
Sticking on real life applications.
Speaker Change: And demonstrates superior subscriber already I have to believe that that will increase the funding situation at Davinci is Goldman. So these are the looting.
As we continue to execute our roadmap the opportunities for savings towards this research customers family Goldman National apps University academic researchers will continue to increase.
Speaker Change: I mean do you have already quantified in our investor presentation that along with IDC report that the market opportunity for research applications.
Speaker Change: In the next five years is roughly 7% to half a billion dollars.
Speaker Change: So that's a pretty sight and even if it's still talking diesel which I at this point, it's still a very sizable market and Thats really what we are focused on right now getting.
Speaker Change: Quantum computing capable.
Speaker Change: To take on those kinds of applications research applications and get a foothold in that $75 billion marketplace in about five years.
Speaker Change: Thanks, so much.
Speaker Change: Thanks, Dan.
Speaker Change: Thank you and as a reminder to ask a question you're wanting to Crestar, one one and wait for your name to be announced.
Speaker Change: Our next question coming from the line of Craig Ellis with B Riley. Your line is now open.
Speaker Change: Yeah.
Yeah. Thanks for taking the question and guys congratulations on the roadmap.
Speaker Change: Technology development progress Sue boat I wanted to start just by going back to an angle on the prior question and were David Williams for US with this inquiry on U S based engagement activity, but the question smart focused internationally given the nice progress in the most recent quarter.
With the Israeli quantum computing center and.
Speaker Change: And U k's and QC C.
Speaker Change: Opening with its hard to class system. The question is as you look at the next 12 months or so with international engagements. How has your view changed in the last three months given the progress that you're making.
Speaker Change: Certainly with the progress we are making Craig we are seeing more and more opportunities and opportunities with other governments.
Speaker Change: As I mentioned earlier, there's probably 15 countries getting close to 20 countries that have that are active quantum program.
Speaker Change: National Quanta ambition of some type.
Speaker Change: <unk> launched how quantum computing.
Speaker Change: That particular country and certainly U S is the one that we focus on the most along with UK, but as you said, we are getting more and more today is really quantum computing center, but you go along the eastern Europe.
Speaker Change: And select countries in Asia, the opportunities are definitely increasing.
Speaker Change: As the hardware gets more capable as we start them.
Speaker Change: Better quality demonstrations.
Speaker Change: The in terms of hardware, but also along with it.
Speaker Change: Corrections like what we just talked with your lane.
Speaker Change: In practical application demonstration that we have done we have done some work with Moody's and HSBC and standard chartered financial customers Adi in Abu Dhabi.
Speaker Change: When they published the essential papers with some tactical applications and show potential this quarter looked at and that increases the appetite of research oriented commercial customers as well.
Speaker Change: So we certainly think that's hardware continues to improve.
Speaker Change: Next year goes on we will continue to get better and better opportunities with government customers, but also some commercial.
Speaker Change: Research oriented type customers.
Speaker Change: That's very helpful. And then the follow up question is just circling back on.
Speaker Change: The company's <unk>.
Speaker Change: Can you and I think there were earlier comments about a $7.5 billion Tam over the next few years.
Speaker Change: Can you just help us calibrate the reassemble outlook that we should have.
Speaker Change: Over the next three or four years, and then by the end of the decade, as we think about where what Kevin is focused on all the progress that it's making with the road map and with things like scaling up with this.
Speaker Change: Our base cube approach. Thank you Sir.
Speaker Change: Sure so.
Speaker Change: If you take a look at that Investor presentation. These site to seven 6 billion dollar number that IDC has.
Speaker Change: <unk> five years' time period again, primarily go to market.
Speaker Change: National Labs, and diesel can be entered customers.
Speaker Change: At least in the next five years, we believed a sizeable part of that market is going to be on the mice quantum computers and a smaller part will be.
Speaker Change: Quantum computing as a service over the long run, we certainly expect to cash too.
Speaker Change: Onto my quantum computing, but for the next five years, we think majority of the number and Thats. What <unk> reports also concur with that next few years most of the market is going to be optimized for research customers because they like to have optimize computers as opposed to just through the cloud.
Speaker Change: So that's the number we're focused on right now optimize multiple theaters over the next few years for such customers.
Speaker Change: Although the seven and a half clearly the adcs and other organizations that have done that market study haven't broken it down by modality.
Speaker Change: Certainly expect superconducting to be dominating that number.
Speaker Change: Mainly because.
Speaker Change: Although the gait speed.
Speaker Change: The higher tier with current capability.
Speaker Change: I mean, it's great for trapped ion and fewer items to demonstrate what they have done and they'll continue to do that.
Speaker Change: I'm sure they'll do a nice job in demonstrating high fidelity look youbet com systems.
Speaker Change: But when you are four orders of magnitude slower than superconducting it really cannot lend itself to hybrid computing at any particular applications in the data centers.
Speaker Change: Chart dominated obviously by the Cpus and Gpus. So we think a big part of the $7 $5 billion is going to be superconductor. All those other modalities will play a role.
Speaker Change: And it is super conducting really.
Speaker Change: The tank I mean, along with us IBM as a key player in that marketplace.
Speaker Change: There are other competitors too I mean, Google is there, but they are not quite interested in that kind of a market nor is Amazon.
Speaker Change: Theres Sofia Finnish company, Golar, EQM and Dutch company called <unk>. So there's a few competitors we have in the superconducting Besides IBM, but we didn't give an order position the definitely expect to be a leader in that space and we expect sizable market share of the superconducting portion. So when you do the math, we think that's a size.
Speaker Change: A multibillion dollar opportunity for us to go after in about five years.
Speaker Change: Does that answer your question.
Speaker Change: Yes, that's extremely helpful. Thank you so boating and good luck as you push ahead.
Speaker Change: Thank you okay.
Speaker Change: Thank you.
And I'm showing no further questions in the queue. At this time I will now turn the call back over to Dr. Kulkarni for any closing remarks.
Dr. Kulkarni: Thank you for your interest and questions. We look forward to updating you. After the beginning of the New York with our fourth quarter results and full year 2000 2040 sites. Thank you again.
Speaker Change: Ladies and gentlemen that does conclude our conference for today. Thank you for your participation and you may now disconnect.
Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: [music].