Investors Shoot for the Moon

Jon Quast (0:03)

Investors are shooting for the moon. Motley Fool Hidden Gems Investing starts now.

Welcome to Motley Fool Hidden Gems Investing. I'm your host today, Jon Quast, and I'm joined by Foolish Contributors, Tyler Crowe and Matt Frankel. We've got several things on the docket today, including some moon shots and a question from our mailbag. First up, we want to talk about quantum computing.

On the Hidden Gems team, we are tracking several investing trends that are going to be very important for the future, including this one of quantum computing. We are considering the top companies, we're developing scoring systems around them, even portfolios. The first bit of news that we have comes from Alphabet, releasing a press release this past week, and then we also have something from Quantinuum. We're going to break this down into two. Tyler, I want to start with you. I'm going to throw you some questions here on Quantinuum, and what it is saying is a record-breaking error correction. But a couple of questions here for our listeners. Basically, can you talk about the differences between logical and physical qubits, and then why does quantum computing even need error correction in the first place?

Tyler Crowe (1:15)

Well, first off, Jon, thanks for really tossing me some softballs here to start with the show.

Let's start with quantum computing because it's not exactly the simplest topic, and I am going to grossly oversimplify this. I know there's going to be a lot of people who know a lot more about the subjects and technical experts probably listening that are going to shout at me. But I'm going to try to get through this so most everyone can understand. Qbits are basically like the bits and bytes that we know on our classical computing computers. It's the way that we store the information. Physical ones are the method in which we store in physical space. All forms of quantum computing do it in that we have various ways of actually doing quantum computing. But all the methods basically manipulate known quantum properties like superposition and entanglement. I'm very glad that we do this on video now because I get to show you the deep research that I've been doing this for years. It's the book I've been reading my children, Quantum Entanglement for Babies. I'm sure that a lot of people are really going to know a lot more after they read up on that. But moving from physical to logical to your question, physical qubits, again, manipulating the quantum properties of known atoms and things like that. The logical is we're translating these manipulations, using the information across many physical qubits, sometimes hundreds, thousands, sometimes even millions, to detect when any single physical qubit contains errors. It's a way of self-correcting for a very, very complex and honestly a delicate sort of system. These systems have to be held at extremely low temperatures or in strong electromagnetic fields or anything like that. So any single physical qubit can sometimes act up. So the idea being that we use logical qubits to make sure to self-correct for anything that any single physical qubit is doing wrong.

Now, this brings us to the Quantinuum story, where what they have announced is that they have the lowest error rate or in the business, it's called logical fidelity. Basically, it's saying that they are detecting about five errors over one million operations. That's about 10 times better than the record that Quantinuum had set only a month ago. So I think the big news and why actually the stock is moving quite a bit today, because of it, is because this is like a major leap forward and it's happening over a relatively short amount of time.

Jon Quast (3:49)

Tyler, I'm all for you reading to your kids about quantum computing. I just hope that Schrödinger's cat isn't in the book. That might damage some little.

Tyler Crowe (4:00)

No, no Schrödinger's cat, although a couple other ones that might be a little challenging for a three-year-old.

Jon Quast (4:06)

Matt, let's turn to you and talk about some Google news here. So in the press release that had last week, it said it's working on something called Magic State Cultivation, reducing errors by 40x.

It sounds weird to talk about Magic States when we're talking about an investing podcast. Let me just say this. Magic States, basically, you need them to do powerful operations in quantum computing. They're single use, so once you use up one of these things, they are gone. That's the problem because you need millions of them.

Up to this point, we're using a method called distillation, basically taking a bunch of fuzzy Magic States and distilling them into one clear usable state. Google developing a different strategy here, cultivation, growing these from scratch and pruning out bad ones using the good ones, but potentially a more efficient way to make them. The problem is, since they are single use, the quantum computer is actually using compute power to make them, and most of the power is going just to make these Magic States, leaving little for the actual operation. It's just trying to perform, so doing it more efficiently sounds good, but what else do we need to know from this Google release?