Venture with Grace
00:15:11 · Juha Vartiainen, Grace Gong
[00:15:11] S1: lot of [00:15:11] S0: strategic investors. How much does these things actually cost to build? And for each machine, how much can it power compared to regular machines?
00:15:27 · Juha Vartiainen
[00:15:27] S1: Yeah, this is actually a very complex field in that sense. So quantum computing is mostly interesting for, let's say, public side customers in this point of time. We have actually the last three sales were for the private customers, enterprises to Japan, to Poland. But actually, most of our sales are for the public side and there are like three layers of customers. So actual demand comes very often from, let's say, scientists, engineers, innovators type of people. Those are the end customers. But usually they don't need to buy the quantum computing themselves, but they are usually associated to some, let's say, end user networks or some institutions. So we have usually some institutional, let's say, counterpart for signing the contract. So that could be HPC centers, high performance computing centers. That could be some research institutes, sometimes universities. So those are our actual customers for on premise quantum computers. But then for them, the business is more or less like hosting computers or servers. They're sometimes running a data center. But then, as I said, it's actually that they get their funding of the decisions from the government. So we to work also with the government. So that's very like a strategic decision to so we have to talk to the government, we have to talk to the data center, we have to talk to the end customers and convince all of them that it's like our offering is the winning one. But yeah, then there are public tenders often and so on. But that's more or less the structure of our customers. And we will see this is a relatively new field, and it's moving quickly. We have started to see this so called quantum advantage to come closer and more and more interest from private sector. Let's say companies are starting to put their own money on the table. They start to see ROI in some point, also quantum computing. So we hope to see more, let's say, private side customers, and it might be different there when that time comes.
00:18:04 · Grace Gong
[00:18:04] S0: So IQM has over €102,000,000 in the order backlog. And what about we could... If you can... I... Obviously, without giving, like, the particular customer information, but, like, how how is it kind of, like, structured? Would it be, like, It's like a fuel machine or like, does it like, do you... How do you guys charge basically? So like, obviously, I think like traditional... Obviously, there's like the machine. So like, do you guys charge services or usage? Like, how how is it different than, like, the current SaaS or current... Whether it's compute or, like, just SaaS kind of, like, model?
00:18:50 · Juha Vartiainen, Grace Gong
[00:18:50] S1: Right. So, yeah, it's a public information. We have sold close to 30 quantum computers and we have delivered close to 20. So we have pipeline about 10 quantum computers. And as you said, that's worth of about 100,000,000. So there are roughly like 10,000,000 projects, each of them. And we have some... We have different models. We have a model for research for education, which is, let's say, closer to 1,000,000. And then there are some, let's say, flagship models for data centers, which are more expensive. They usually come with some upgrade path. They might come with some educational package. They might have some service together with them. So let's say it's not like a bare hardware whose cost is that much, but it's like a package. Often that package is negotiated to the needs of each customer separately. Let's say, I think these profit margins are public information as well. I don't remember them by heart. Maybe November 5 is our next earnings call, so our CEO is probably telling about the latest profit margins. [00:20:13] S0: When... I guess, like, what would Quantum Computers, like, commercial value be? So, like, for example, I know that, you know, you guys and the Deutsche Bank demonstrated, like, a quantum algorithm for real way scheduling real operational data. Right? So this is kind of like the public information on your website, but maybe we could talk about what is a real life application side of things in... Or the commercial value of the-
00:20:44 · Juha Vartiainen
[00:20:44] S1: quantum? Yeah, there are like a lot of like, let's say there are like classical quantum computing use cases. So it's all started maybe from these breaking the encryption codes, but that's maybe far away like a really to implement. But that's like driving the interest. Then there are use cases for material science, chemistry, which are, let's say, low hanging fruits, but still we are not yet there, but maybe soon we are there. But then there are like some very interesting use cases, let's say, security domain, which are like maybe interesting for secular telecom operators, which are already available today. So they are adding to the security of communication, for example, like generating some quantum keys with a better quality of entropy. Similarly, also, this good quality of entropy might be used for training AI models or something, and that's available already today. So we have seen actually a substantial amount of interest for this type of applications from private companies already now and an increasing amount of applications. So there are many application algorithm companies who are developing this for their end customers. So let's say we are living in really exciting times in quantum computing. So the market size is growing a lot like 30% a year. We are not even there in this, let's say, in the area of commercial applications. So very soon when we have beyond the crossover point, the markets could grow much more. So that's very exciting times.
00:22:50 · Grace Gong
[00:22:50] S0: I wanna talk about, like, since, like, I think at the beginning you shared that, like, you know, in 2018, you guys kind of spun out of the, you know, Aalto University and VTT, like, the company, and it was kind of like a physics lab. Now it's like a hardware company. You transition yourself from COO to nowadays, in charge of all these kind of global affair and everything. So can we talk about the transition of the company? What is it like in the past ten or over like ten years? Like, if you're separating the company into like different phases, like, what are some like different phases that you guys kind of have been through from like maybe?