Why the CIA and Amazon Are All Over This Quantum Computing Upstart

The CIA and the world's biggest Web retailer want to see the world of Big Computing turned upside down.

That's why they joined a $30 million investment round in a small supercomputing startup. The firm is taking a radical new approach to how these processors crunch massive amounts of data.

It's a field that is quickly turning its skeptics into true believers. Then again, cutting-edge tech like quantum computing doesn't come along every day.

No doubt, quantum computing is some pretty complex stuff. So, let me simplify it for you. At its root, quantum computing relies on the high-speed action inside atoms as well as particles of light.

The result is speeds so fast it makes your head spin.

We're talking about computers that could perform some functions millions of times faster than anything that's on the market today.

It's no wonder the nation's top spies and Amazon.com (Nasdaq: AMZN) founder Jeff Bezos want to get in on the ground floor. Though they didn't say how much each ponied up, both took part in the most recent round of financing for D Wave Systems.

In-Q-Tel, which invests in high tech that supports the CIA, and Bezos Expeditions join a growing list of D Wave investors. Other blue-chip backers include the Business Development Bank of Canada, Draper Fisher Jurvetson, and Goldman Sachs (NYSE:GS).

D Wave: Quantum Computing's Kingpin

Founded in 1999, D Wave spent its first five years in discovery mode. By that I mean the small firm was focused on coming up with novel ways to make quantum computing work and then get the patents it needed to protect the moat it was building.

That early attention to detail has clearly paid off. Today, D Wave holds 90 U.S. patents and has roughly 100 more pending around the globe.

Here's the thing. D Wave is founding a whole new sector of the computing industry while making sure it maintains a strong first-mover advantage.

After struggling for years, D Wave is now on a roll.

Of course, that doesn't mean the small company will succeed in the long run. That's the nature of high-tech startups -- most fail.

But consider this: defense giant Lockheed Martin Corp. (NYSE:LMT) has already bought a D Wave supercomputer. Not only that, but just two months ago a team at Harvard used one of the firm's machines to solve a complex riddle of how proteins fold.

The result, team members said, could lead to better designs for both drugs and vaccines.

Thus, as I see it, D Wave has a great shot at succeeding. You should keep an eye on this firm because there's a very good chance the company will eventually go public.

If it doesn't exit startup mode by selling stock, the other route would entail getting bought by a larger firm that has the sales, support and marketing teams in place to take this tech around the globe.

Either way, D Wave stands to disrupt the field of complex computing with a wide impact on science, medicine, and artificial intelligence -- just to name a few.

Quantum Computing's Disruptive Technology

Now you know why I keep saying that high tech can save America.

Quantum computing will play a major role in solving some of the most complex challenges of the very near future, ones that require massive computing power and speed.

Some may accuse me of glossing over the fact that D Wave has its headquarters in Vancouver, Canada. But make no doubt about it, this tech is made in America -- the firm's superconducting chip foundry is based in California's Silicon Valley.

And that brings up a point of irony. Quantum computing is all about getting beyond the limits of standard chips made of silicon.

See, those chips are what we refer to as binary. That means they use ones and zeros to work. And therein lies the limit; they can't use both at the same time.

For decades now, engineers have gotten around this challenge by stacking more and more transistors on each chip. But now that we have billions of those tiny devices on semiconductors, we are running out of real estate.

Enter quantum computers. These are not held to just two states. They encode as quantum bits, called "qubits." This is the big breakthrough -- qubits represent atoms, ions, photons or electrons. Their control devices work together as computer memory and a processor.

It's their microscopic size and the ability to be in two states at once that give quantum computers their huge power and blazing speed.

For D Wave, the big break came in May 2011 when the firm published an article in the scientific journal Nature showing that its superconducting process really does work.

Just two weeks later, it sold its first system to Lockheed Martin.

A few months after that the defense giant said it was joining forces with top-rated college University of Southern California, which will house the system and use it for research.

But as much as I believe in this tech, I have to say it does have a limit to widespread use at this point. Simply put, qubits remain tricky.

They don't like even the slightest amount of heat. To function, the machine must stay near absolute zero. We're talking close to minus 450 degrees Fahrenheit. Forget putting one in your basement or office building for that matter.

Not only that, but they are subject to interference. That means the room must have heavy shielding to avoid magnetic radiation.

Let me close by noting that even though there are few places where you can put these machines today, I believe they could have a huge impact in the Era of Radical Change.

What used to be science fiction is becoming science fact in no small measure because we keep building faster and more powerful computers.

So, keep an eye on this one. If it hits all its marks, D Wave Systems will really shake things up.

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