IBM CEO Arvind Krishna Talks Quantum Advantage, Profit Strategy

**SPEAKER_1** (0:02)
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**SPEAKER_2** (0:07)
Romaine brings us a very important conversation right now against the backdrop of this market. Romaine Bostick at the Mizuho Tech Conference underway right now in New York with the CEO of IBM. This is live on Bloomberg. Romaine, take it away.

**Romaine Bostick** (0:25)
Thank you, Joe. I am here with the CEO of IBM, Arvind Krishna, here at the Mizuho Technology Conference in Lower Manhattan. Great to have you here.

**Arvind Krishna** (0:33)
Pleasure to be here with you, Romaine.

**Romaine Bostick** (0:34)
Obviously, all the talk is about AI. We talk about digital AI. We talk about biological AI, physical AI. Everyone's already looking around the corner, including you, to quantum, which of course many people think is going to be the next big thing, something that IBM has been working on for years. Two years ago, you laid out a relatively ambitious target that we would actually see quantum advantage using IBM hardware by the end of 2026 We're halfway through the year. Are we going to get that?

**Arvind Krishna** (1:03)
Absolutely. If I look at what some of our partners, like the Cleveland Clinic, are getting done, what the national labs like Oak Ridge are getting done, I can already see the early signs of what they're getting, the progress they've made.

**Romaine Bostick** (1:16)
When we talk about what that progress could mean, not only for the world of business and finance, but as an application through our society, is healthcare the first place that gets it?

**Arvind Krishna** (1:28)
I think that materials or maybe simple molecules are the very first place. Maybe magnetic materials as alternate for some of these things that are very hard to get. I'll use the word rare as a bit of a pun over there.
I think lubricants to maybe get more effective energy, maybe better EV batteries, and then small molecule drugs are there in the first set. But I also want to be equally excited about what we could do about modeling weather perhaps, or modeling flows, to improve how chemical plants work, maybe aerodynamics to improve how vehicles and airplanes work. These are really, really exciting use cases for us.

**Romaine Bostick** (2:09)
I am curious, though, I mean, when we talk about actually starting to see some sort of proof of life on quantum advantage this year, your own head of research has said that that process might be a little bit more elongated. Is there a disconnect between your ambitions and what he's seen from the scientific perspective?

**Arvind Krishna** (2:24)
No, so I'll take an example of what's happening on molecule properties. So last summer, June of 25, we could maybe understand a five atom molecule. That's not very exciting. You could do that on a piece of paper if you're smart enough.

**Romaine Bostick** (2:40)
Okay, I'm not smart enough, but I trust you.

**Arvind Krishna** (2:42)
Last November, that team could do 300 atom molecules.
Okay, you'll say that's great progress, five to 300, but you could probably do that on a normal supercomputer. So, okay, that's not quantum advantage. This April, they did 12,000 atoms. They did half of a protein called trypsin.
I think they're on their way to about 30,000 atoms already. So, five to 300, same amount of time, 300 to 12,000. One more month, 12 to 28,000. It gives you the rate of improvement, some of it from the hardware, some of it in algorithmic techniques that people are learning of what can work. By the way, at this size, you can't actually do it any other way.

**Romaine Bostick** (3:27)
Okay, well, we talk about the commitment that you made to this. You've invested or committed to invest about $10 billion in this, which I assume is the tip of the iceberg. You got some pretty big backing from the federal government, giving you $1 billion. Not that you need it, but certainly a vote of confidence. When you start to see the government getting involved, obviously you have a lot of, I guess, quasi-competitors in this space also getting involved. Does that accelerate this pace?

**Arvind Krishna** (3:53)
That's what I believe the government investment is for. So if you look at it, it's not so big that it's controlling everything. However, it's a sign of endorsement, and it is a signal of them wanting to get speed, meaning IBM, you're going to do this. If we commit to do this, will you do it faster? Will you open it up to everybody else so it's open to the ecosystem? And we said yes, because we actually believe in the ecosystem is important, and if government investment gets us there a year or two or three before we might otherwise, both of those are worth it. And that is what is important about that.