I know many readers are worried about inflation.
It’s a topic we’ve covered many times here in The Bleeding Edge in the past few months.
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The crossroads of AI and quantum computing…
It just happened. Google spun out its secret quantum computing group into a standalone company.
The new company is Sandbox AQ. The A stands for artificial intelligence (AI). And the Q stands for quantum.
As we discussed back in January, Jack Hidary leads this new company. He is uniquely qualified to head up Sandbox.
I keep his book on quantum computing – Quantum Computing: An Applied Approach – on my bookshelf. Hidary’s work has focused on the cross-section between quantum computing and AI.
While the number is not disclosed, we do know that Sandbox AQ is coming out of the gates having raised “nine figures” in venture capital (VC) funding. Google’s willingness to allow the team to take in a large amount of outside capital means that they are going to give Sandbox AQ the autonomy and room to run.
We also know that the raise pulled in some high-profile investors… Former Google CEO and Chairman Eric Schmidt participated, and Salesforce CEO Marc Benioff also invested in the round.
[Meet S.C.G.: The iPhone Killer – A New Technology That’s Projected to Grow 4,572%]
Given the company’s setup, Sandbox AQ will become one of the most important quantum computing companies on the planet very quickly.
If we remember, Google shocked the world when it announced that its 53-qubit quantum computer had achieved quantum supremacy in 2019.
Interestingly, Google has been largely silent since then about any progress with its quantum computing technology.
Google has not revealed any of its quantum advancements over the last three years… yet given Google’s rate of development, I know that there must have been at least a couple of breakthroughs.
Sandbox AQ is focusing on three specific areas of development: financial services, health care, and cybersecurity. These are its three major buckets.
Using the power of quantum computing – combined with AI – for financial services, as well as to help accelerate drug discovery, are two obvious applications. But the third area of cybersecurity is the one that has me worried the most.
Most of the world thinks that useful quantum computers are years into the future. Even some “experts” believe that quantum computers won’t have the power to crack the standard AES 256-bit encryption protocols that keep our data and communications safe today.
I don’t agree.
In fact, I’ve predicted that someone will announce a 256-qubit (or more) quantum computer within 2022. Theoretically, that could crack standard encryption technology. Initially, this ridiculously powerful quantum computer will likely have too much noise to do so, but as the fidelity improves, it will only be a matter of time.
While I don’t trust Google at all, Sandbox AQ is working to develop technology to protect data and communications against this kind of quantum technology.
This kind of quantum-resistant technology will be critically important for pretty much all government, military, corporate, blockchain, and e-commerce websites around the world.
We desperately need companies to work on solutions to this problem. New encryption standards need to be developed, and new software needs to be commercialized to maintain the privacy and integrity of our data and communications. I’m glad to see that Hidary is making this a priority.
2022 will be an exciting year in quantum computing. And now that Sandbox AQ is funded and spun out of Google, hopefully we’ll be hearing more about the progress that they have made.
[Trend Alert: Bill Gates, Mark Zuckerberg, Elon Musk, Jeff Bezos – All Betting on S.C.G.]
Waymo just launched in its second city…
Big news from Waymo: The company just launched a fully self-driving taxi service in San Francisco. This will be the second city in which Waymo cars will not have safety drivers.
I had the privilege of using Waymo’s self-driving taxi service in Phoenix, AZ last year.
Waymo’s car navigated the streets of Phoenix perfectly.
There’s a big difference between Phoenix and San Francisco, however.
Phoenix is flat with neatly aligned, grid-based streets. On the other hand, San Francisco has steep hills, complex driving patterns, one-way streets, and heavy traffic. It’s much more difficult to navigate.
So the fact that Waymo is ready to go full self-driving in San Francisco without safety drivers shows us that the tech has made some large improvements.
If its cars can handle the Bay Area, Waymo should be able to launch the same robo-taxi services in any city in the United States and beyond.
Which brings up an interesting question – why did Waymo go with San Francisco as its second choice? Why not move into the easier cities first?
I’m sure the fact that Cruise launched its own self-driving taxi service in San Francisco was a major catalyst. We talked about that development last month.
After all, the Bay Area is home to Google’s headquarters. The company doesn’t want to take the back seat in its own backyard.
Regardless of the reasoning, this is absolutely a precursor to nationwide robo-taxi launches.
Waymo is clearly trying to generate some excitement about the commercialization possibilities of its own self-driving technology. I’m expecting a major partnership announcement this year.
That said, we still have patchwork regulations in place around self-driving cars and ride-hailing services. Right now, each service needs to engage at both the state and the city level to gain approval. This slows the process down a bit.
Ultimately, I believe we will see a more unified approach to self-driving cars within the next 24 months or so. At that point, robo-taxi services will become prevalent in every major city.
And as this trend rolls out, the investment opportunity will skyrocket with it. Yet my favorite way to profit isn’t through Waymo… Cruise… or even Tesla. To learn what it is, go right here for the answer.
The largest VC solo round in history…
We’ll wrap up today with an incredible development in the crypto space.
We talked in January about how Katie Haun split with Andreessen Horowitz to raise her own crypto fund. At the time, Haun expected to raise $900 million. That estimate turned out to be far too conservative.
Haun just raised an incredible $1.5 billion right out of the gates. This is the largest venture capital (VC) raise for a solo practitioner in history. And it shows just how much excitement there is around cryptocurrency and blockchain technology.
Haun will split the capital between two crypto funds: She’s dedicated $1 billion as growth capital to established blockchain companies, and she’s earmarked the other $500 million for early stage startups.
It’s remarkable how much capital continues to flow into the crypto space like this. Some are saying that it feels like we are entering bubble territory here.
But I am seeing a different dynamic at play.
If we think about traditional high-tech VC raises, all the capital raised is used by the startup to build their product or service… That’s not the case with blockchain companies.
We have talked a lot about “Web 3.0” incentives recently.
For instance, a platform can pay out its own cryptocurrency to encourage developers to build on the platform. This in turn makes the platform more robust, which attracts consumers. Often this means the price of the platform’s crypto increases, further rewarding the developers.
GameStop’s move into non-fungible tokens (NFTs) is the perfect example.
GameStop and its partner Immutable X allocated $100 million in incentives for developers. With $100 million in payments up for grabs, we can be sure that developers will flock to GameStop’s NFT platform for a chance to get paid.
And the VCs have learned that incentives are critical to getting crypto projects off the ground quickly. As such, they are accounting for the need for this kind of “incentive” capital with each raise.
The VCs recognize that this kind of capital is needed by the blockchain startups, which is why the size of the typical raise for a company in the crypto space is so much larger than normal high-tech rounds. VCs actually have to anticipate the need for this kind of capital, which is why their own raises are that much larger.
And the end result is that these crypto projects are getting a multi-year runway. The VCs are giving them a long leash so they don’t have to come back for more money every year. They can focus exclusively on building their ecosystem.
This speaks to how much opportunity is out there in the crypto space right now. Clearly, the VCs expect some of these projects to gain mass adoption. Otherwise, they would never pour so much money into a single sector.
I see this as very bullish for crypto and blockchain technology over the next few years. These massive funding rounds will lead to a long string of developments in the space.
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Editor, The Bleeding Edge
[Breakthrough: This trend is BIGGER than Blockchain, Ai, 5G, Robotics, and the IoT COMBINED!]
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