The Introduction
IonQ will announce an application that can be run on their upcoming hardware during their next earnings call in November. I think that the announcement will make calls print for weeks to come. In this article I'll be going over why I have come to that conclusion after listening to the company presentation at the Quantum World Congress 2024.
IonQ's Peter Chapman started the talk titled 'Building a Large Global Quantum Business' by giving updates on the business side, while Dean Kassmann would talk later about the technical milestones achieved.
Business update
Exponential development rate of QC tech
Chapman started the talk with a surprising insight: "First, I want to say that I think quantum is accelerating much faster than most people thought it would.
"Contrary to many opinions expressed on Reddit, YouTube, and across social media regarding the maturity of the quantum industry, experts generally agree that 'real' useful solutions are at least 10 years away.
Having Chapman, the CEO of arguably the leading quantum company, assert that the development and deployment of quantum computers are occurring much faster than anticipated presents a clear contradiction. Either the experts in quantum computing and physics are correct in their collective estimates, or IonQ's management is advancing quantum technology faster than expected.
There is a clear gray area in the debate concerning the realistic timeline for bringing advantageous quantum computing systems to market.
Scaling IonQ to $1 Billion
Chapman continues by stating that the business part of the presentation will focus on the topic of 'scaling a quantum computing company to reach $1 billion.
A brief history
"In 1995, IonQ had its breakthrough when Chris Monroe and others developed the very first quantum logic gates. This initial breakthrough led to a seed round 10 years later, marking the beginning of the company.
From 2016 to 2021, we raised two additional VC rounds and created multiple versions of hardware (five generations) in an academic setting. During this time, quantum physicists assembled these systems at the IonQ laboratory. I believe the following gives great insight into the company culture and vision of its people. Business analysts, take note:'
When I joined the company, there was no intention of… The board told me, “Don’t worry about selling systems, and don’t worry about the competition; just build the best hardware.” And that’s what we did.'
With this mentality, the first IonQ roadmap was built."
From an academic setting to production
"Even without sales, IonQ had significant luck at that time by raising money, which later allowed the company to transition from academic systems to engineering and building 'real' quantum products.
The shift from the academic phase to the engineering phase required IonQ to think creatively about how to build the product. IonQ began hiring people with backgrounds in product development and large-scale sales. A manufacturing plant was established in Seattle, enabling in-house assembly based on engineering drawings.
'We reached a great milestone; quantum computers built at IonQ are not assembled by physicists, as we want them focused on next-generation systems rather than assembly line work.'"
Always 3 generations ahead in systems
Having this system designed, where one part of the staff focuses exclusively on creating next-generation products, really makes me think about Tencent.
$TCEHY has divided its team into two groups: one group consists of developers who create the games sold to gamers, while the other comprises financial officers who aim to invest that newly acquired capital and generate returns. This approach seems to be a gold standard across great high-margin businesses. 🤔
Scaling out to focus internationally
“When you start to ship products, you need to scale your sales team internationally and build a field service organization to support the machines you just sold in places like Japan.
And can you break your machine down into parts, put it into containers, and ship it across the world?
These are the little details that most people don’t consider in quantum, according to Chapman. IonQ’s advantage lies in their preparedness for every small detail and their ability to work several generations ahead into the future.”
Sales and revenue numbers
"IonQ is approaching $100 million in bookings this year, which shows that 'quantum' is indeed a viable business. We've achieved this in record time—going from $0 to $100 million in bookings in just four years.
If you look up how long it took the largest companies to reach $100 million, you'll find that it took Microsoft about 10 years to achieve that milestone. Microsoft was founded in 1975, and in 1985 they had surpassed that number in annual revenue."
While realized revenue and bookings are not the same, and it took Microsoft 10 years to reach that revenue, achieving $100 million in bookings in just four years is still an impressive accomplishment for IonQ.
Getting to $1B in revenue: IonQ's plan
Chapman continued: "You need to have international sales, and you're also going to need an application that can deliver value and be used by Fortune 1000 companies, hopefully across entire industries, which can generate $100 billion in revenue on its own."
"And in fact, at the upcoming earnings call, we will discuss the first of many applications that we believe will be enabled by our upcoming hardware. So it's a really exciting time because we're approaching a place in the Noisy intermediate-scale quantum (NISQ) era that can deliver that value ($100B)."
This is next-level thinking. Here are three key points:
- Chapman believes that this application will be used industry-wide, indicating a broad solution that multiple parties can benefit from.
- He suggests that it could be worth $100 billion on its own.
- This is linked to international sales, as going international is a requirement for a company to reach the $100 billion mark, alongside having a strong application. Shipping an app worldwide as part of a package with their hardware, already indicated to be ready for production, with detailed planning for assembly, shipping, and support teams—makes an international approach sensible.
Chapman continues to refer to the large number of quantum hardware systems required to achieve $1 billion in sales. "If you're going to generate $100 billion and you need 50 computers, you better be able to manufacture those 50 machines. And the cost per Qubit better be much lower than it is today."
"A secret hiding in plain sight is that to scale up to a billion dollars, you have to scale all the other parts of your business, not just the hardware. I think that IonQ is unique in that this is exactly what we're doing right now."
Consider their strategic approach of working on several future generations at once, planning months ahead, and their efforts to become a software company as well. This strategy facilitates easy access to their hardware by integrating drivers from all their competitors. I believe IonQ's team has been extremely busy over the past few months.
In preparation for international sales, IonQ has been focused on delivering results, and now we’re starting to see the details of their work.
A paradigm shift, coming next earnings call
"We're scaling up manufacturing for the application that will require tens, if not hundreds, of quantum computers."
Wait a minute. This is it. Every time I listen to this presentation, I keep discovering new insights. Peter Chapman just mentioned that this upcoming application will need 10 to 100 quantum hardware systems. What kind of application could be so impactful that it requires this many systems, more powerful than supercomputers?
I believe this is the industrial paradigm shift we've all been waiting for. An announcement regarding this program is expected on November 11th.
Technical achievements
Dean Kassman took over from Peter Chapman to shift focus and discuss the milestones achieved.
"Peter has talked about enterprise-grade solutions; I’m going to discuss performance and some aspects of physical scale."
"Our North Star is a balanced approach among the following components:"
Commercial advantage through the right choices
IonQ's management believes that achieving their goal of becoming a $100 billion quantum enterprise requires three key components.
"Scale is our North Star. We build it through both modularity and all other engineering best practices we have in place. The key contributors to scale are the ability to connect Quantum Processing Units (QPUs) together."
"QPUs in a single machine (trapped ions) start as a linear chain in our architecture and evolve into multi-core systems. They then transition from multi-core to connected multi-cores."
Path: Trapped Ions > Multi-Core > Connected Multi-Cores.
This is based on the same principle as NVLink, which connects GPUs together.
Quantum network effects
"We have discussed a set of milestones in our overall path to connecting QPUs:
That slide begins with an analogy to local area networks. It starts with a single point, then progresses to point-to-point connections, and eventually leads to many-to-one connectivity.
We've highlighted four milestones here, but there are many more we can include to provide additional context. The beauty of what we're doing is that it doesn't require any changes to the architecture.
Operating effectively in a room-temperature setting (even though data centers tend to be a bit cooler) is ideal, as it allows the world to adopt IonQ's systems without needing to alter their environments."
In Full Forte: IonQ's keys to high performance
"IonQ's barium bet is paying off. 'We have been making continuous progress on our barium technology. This validates the overall approach we have taken with our development systems as we move toward Tempo.
''Tempo has been in the works for a while, and our advancements in barium demonstrate the viability of our technical path as we continue to deliver.'"
Closing remarks
"We're really excited to share the path we're on and welcome you to learn more about our systems. Thank you for your attention."
IonQ's website: IonQ.
With their recent update on securing a $54.5M contract, IonQ further proves its path to success in achieving the milestones outlined in its roadmap. I'm really excited to follow this company during this pivotal time when their growth journey is only just beginning.
IonQ ($IONQ) DD: Summary of IonQ's Presentation and a Reflection on the Roadmap. Why I believe calls will print after the next earnings.
byu/Maestroszq inwallstreetbets
Posted by Maestroszq
8 Comments
I broke my blue crayon on my forehead trying not to fall asleep reading that shit. Where tldr
❤️
This is paid by IONQ or some smart money wanted my money on IONQ calls
okay so full port puts on Monday. got it bossman 👍🏽
$100m was a bit different in the mid-eighties than now. Apples and oranges.
why make a post when stock is up 20% already you missed it lmao full puts
It’s legit. Massive construction happening in Bothell Wa where they’re building the manufacturing hub. Approvals getting greenlit like big gov forcing it. Something def brewing 
No TLDR, No positions. WTF is this shit.