Boundless confidence is par for the course with US tech bosses. Niccolo de Masi is no different. Perhaps he has to be that way. The boss of IonQ, the US-listed quantum company, is championing a technology that is still on the cusp of realising its promise and which the vast majority of people struggle to understand.
With his glasses sitting halfway down his nose, the scientist-turned-businessman declares with utter conviction: “Quantum computing is the next leg up in the computing revolution, and I would argue strongly that it is the largest, most impactful and final piece of the computing revolution.”
Founded in 2015, IonQ began with more than two decades of research done by University of Maryland’s Professor Chris Monroe and Professor Jungsang Kim of Duke University. The business makes quantum computers that perform ultra-fast calculations.
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Quantum computing is hailed as the next frontier of technology. It is built on qubits, particles that move away from the binary constraints of traditional computing and can exist as a 0 or 1 at the same time.
This capability, the believers say, means that quantum computers can tackle all sorts of problems that would previously have taken years, such as cracking codes and developing drugs.
The problem is, qubits are hugely unstable, affected by temperature and noise. This makes the tech difficult to scale because it is hard to get them to behave in a certain way in large quantities.
IonQ claims that its different approach to those of rivals, using trapped ions, offers greater stability and accuracy for quantum calculations. Trapped ions are electrically charged atoms held in place by electromagnetic fields, allowing scientists to control and manipulate them with lasers to store and process quantum information.
De Masi said: “We think that our machine today is superior to everyone else’s. There are large companies who don’t have machines that even turn on yet. There are a trillion dollar companies that say they’re in this business, but the power button hasn’t been depressed.”
Listed in the US, IonQ has recently had a market valuation of almost $13 billion (£9.6 billion) and is backed by Amazon, Airbus and Bill Gates’s Breakthrough Energy Ventures.
As faith builds in the company’s burgeoning technology, funding has gathered pace. In July, IonQ raised $1 billion through an equity offering at $55.5 per share, and it has partnerships with Nvidia, Amazon Web Services and AstraZeneca.
Investors are hungry for it too. IonQ’s stock price has soared in the past year to hover at about $45 a share, and some analysts believe it will hit $55 this year.
In August, the company revealed quarterly revenue of $20.7 million, up more than 80 per cent on the year before and guided to $91 million for the year. It made a loss of $36.5 million on an adjusted ebitda basis as it ramped up spending on research and development.
De Masi dismisses scepticism about the company’s low revenue, heavy cash burn and the uncertainty around the technology, saying: “We trade at a similar multiple to companies like Nvidia, Palantir and Palo Alto Networks. There’s a reason why we have the largest business in the space and the largest market cap, and we’re the best capitalised. We’ve been at this the longest and we continue investing. It is a fallacy in the tech markets to believe that if you’re a year or two behind someone else, the competitor’s gonna sit on their hands and you’re gonna catch up.”
The IonQ boss spent much of his youth in the UK
JOSHUA BRATT FOR THE TIMES
The difference, surely, is that the demand for artificial intelligence that the likes of Nvidia cater to is sky high? “I think you’re hard pressed to find anyone else who has sold as many systems as us around the world and does as much useful work today,” he counters. He sees the huge power needs of classical AI as a massive selling point for quantum computers: “Our energy efficiency advantages compound from here.”
De Masi may have Silicon Valley-style ultimate faith in the future, but he actually spent much of his youth in the UK, where he studied physics at Cambridge. He went into banking in London and later business, straddling the worlds of science and commerce.
He was the chief executive of Glu Mobile before the age of 30, later guiding the company to its acquisition by Electronic Arts for over $2 billion and was dubbed a “Spac King”, a reference to his proclivity for special purpose acquisition companies, publicly listed shell companies created to raise money through IPOs to buy an existing private business.
This is how his future became entwined with IonQ’s. In 2021, under a $650 million cash shell, he was casting around for a quantum company to float. “I looked at the whole landscape. I think it’s safe to say in 2019-20, I was the only person thinking that way. I knew enough to be dangerous about this sector.”
He plumped for IonQ to launch on the US stock market, taking over as chairman and chief executive. It was backed by heavyweights including Breakthrough Energy Ventures, Fidelity Management, Silver Lake and Abu Dhabi’s Mubadala Capital.
According to de Masi, this early float has given IonQ a first mover advantage. It also gave investors, thirsty for exposure to the new technology, a way of putting their money into it — which they have done in droves.
Is his aim to get a bigger player such as Nvidia to buy IonQ? “My job as the chairman and CEO is to create shareholder value, run the business as well as I can and make it frankly as expensive as possible for someone if they want to buy it.” His ultimate ambition is to build a company with a trillion dollar market value, to be the Nvidia of the quantum world.
Part of his empire building is happening in the UK, where he agreed a deal to merge with rival Oxford Ionics in June for $1.1 billion. The plan is for it to become the combined company’s global R&D centre.
• The race is on for supremacy in quantum computing
“We’re viewing this transaction as a merger of two great technical roadmaps whereby we can effectively catapult ourselves even further ahead of anybody else that professes to be in the quantum computing industry”. He sees the number of employees in the university town “doubling or tripling” as a result. “I do my best to hoard talent. I like to capture as much of it as possible”.
Considered a critical industry, there are still national security hurdles for the deal to overcome: it is being screened under the National Security and Investment Act. Yet de Masi says: “The sooner that we can merge, the more successfully we’re gonna take on China.”
It comes as the tide for the technology appears to be turning. Jensen Huang, the boss of Nvidia, said in June that quantum computing was “reaching an inflection point”. This month, Google and IBM have said that they can build a full scale machine by the end of the decade.
In the face of their deep pockets, IonQ has a mountain to climb, but perhaps de Masi’s buoyancy will pay off.