Toronto-based quantum computing firm Xanadu is preparing to go public at the end of this quarter in a $3.6-billion USD special purpose acquisition company (SPAC) deal that could make it the first Canadian technology business to debut on the TSX in more than four years.
Eventually, quantum computers will be able to break current encryption standards, which makes quantum-safe systems a national security priority.
Quantum technology has been generating significant interest among public market investors lately, and could have a significant impact on Canada’s big defence ambitions—as evidenced by Xanadu’s participation in major quantum research programs in both Canada and the United States.
That work and Xanadu’s ongoing efforts to build a quantum data centre by 2029 have made founder and CEO Christian Weedbrook a busy man.
BetaKit reporter Josh Scott caught up with Weedbrook to unpack whether he thinks Xanadu and fellow Canadian deep tech startup General Fusion are part of an emerging SPAC trend, the status of his data centre dreams, why he believes quantum ought to be a national defence priority, and how he plans to ensure Xanadu remains headquartered in Canada amid ever-present pressure to move to the US.
The following interview has been edited for length and clarity.
Why should the average person care about quantum computing? Walk me through the impact quantum computers might have on our day-to-day lives.
Often in quantum, the industry talks about fields such as pharmaceuticals. For instance, drug discovery. Material design and quantum chemistry is another—an example there would be electric vehicles, batteries. Also, finance, AI, and so forth. They’re the big buckets of industry that quantum will have huge impacts on.
Having new drugs that can solve previously unsolvable diseases is a key one. The average person can expect drugs now much faster to the market. That’s a big, big, big hope with quantum computing. New, better batteries for electric vehicles and for phones … those are some of the examples.
How far away do you think we actually are from scalable and useful quantum computers?
We have quantum computers now here at Xanadu, but they need to be bigger, like the rest of the industry. We’re targeting 2029, 2030—around that timeframe—to have a large, scalable, fault-tolerant quantum computer. Customers will be very interested in this because, ultimately, you’re solving problems that were taking normal, traditional computers hundreds or thousands of years.
Are Canadian tech SPACs, IPOs, and public market debuts finally back? Do you think that Xanadu and General Fusion are the start of a trend?
I hope so. I mean, that would be great. We’ll be on the TSX, and we’ve been told that we’re the first Canadian tech company to go public on the TSX in a few years now, so hopefully that starts things up. It’s great to see us and General Fusion doing it, and maybe more quantum companies in Canada will think about going this route as well.
Are public markets ready for deep tech and quantum?
We started what would have been our Series D raise in the first quarter of last year. It was going well, but slow, and we were seeing what was happening in the public markets when it came specifically to our field of quantum computing companies. Now we’re just going great guns. We managed to raise $275 million USD for the PIPE [private investment in public equity] part of our SPAC within four weeks, so it really showed us the interest of the public markets.
Image courtesy Xanadu
How do you plan to ensure that Xanadu remains a Canadian-domiciled company once it’s public. Or, in other words, how will you prevent Xanadu from becoming another D-Wave?
That’s a really good question and something we often think about. We’re very hardcore Canadians. We will be not only filing on the Nasdaq, but also on the TSX as well. I think having a founder and CEO like myself who is adamant that we stay here will help. That’s a key aspect for us. We’ll be announcing our board soon, and having Canadian board members represented there is also key. Those two things go a long way.
How is Xanadu’s quantum data centre dream progressing. Are you still on track? What still needs to happen for that to become a reality?
We still are on track. The goal is to build the first quantum data centre here in Toronto, in Canada. This is what I call deep, deep tech. There’s obviously things that can come up in a roadmap—and that goes for any startup, actually—but so far so good, and we’ve always hit our milestones.
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There’s two big challenges for the whole industry. One is related to scalability, that’s a big challenge for everyone currently, except Xanadu. We actually solved that last year in a paper that was published in Nature, an MVP version, which showed how to network together four server racks using our photonic-based approach. The other big area where there needs to be improvement is the performance side. That’s something we’ve been generating a lot of buzz and excitement and breakthroughs in, and so have others in the industry.
What might a quantum data centre actually look like?
Our photonic-based approach is using a lot of off-the-shelf components, and it also has seven-foot data server racks, very reminiscent of a traditional data centre. It’s a very, in some sense, incredible, magical technology, but on the other hand, it looks like this should be part of a normal data centre—which is a good sign.
How important is quantum when it comes to defence, and what’s at stake if we aren’t prepared?
It will affect core defence functions, including secure communication, sensing, optimization, and cybersecurity. The big thing is, eventually, quantum computers will be able to break current encryption standards, which makes quantum-safe systems a national security priority. Imagine if all our bank accounts and encryption and two-factor authentication—everything was vulnerable. We can all see the worst-case scenarios.
Defence has historically accelerated foundational technologies, from the GPS to the internet. All these things signal that quantum is no longer theoretical. Governments are really planning already around its eventual deployment.
What do you hope to see from future phases of the Canadian Quantum Champions Program?
Quantum will require capital, and I think that’s really why the Canadian government is doing a fantastic job stepping up and funding us and three other Canadian companies. All indications from the government is that this is just the beginning of more capital.
While quantum activity has been heating up lately, AI remains the talk of the town. What impact has AI had on the pace of your quantum development efforts?
We have optimization problems, which everyone does, and AI can help with that. More specifically, we do all the chip designs here in Toronto, and send them off to different foundries around the world. They make or fabricate these designs and then send the chips and wafers back to us. We keep iterating on that process based on the information we get back.
A lot of times, the chip itself has a particular design or layout that needs to be optimized. Even recently, we’ve had examples where a team has told me they’ve used LLMs and it’s actually sped up the process by up to a week. In quantum, where it is a race, having these tools at the team’s fingertips has been enormously beneficial.
Feature image courtesy Xanadu.