Goldman Sachs Partners with Startup to Explore Quantum Fintech

quantum goldman sachs
quantum goldman sachs

Goldman Sachs Group Inc. will partner with a quantum-computing startup to explore how the technology could be used to speed up financial calculations and artificial-intelligence-based decision making, according to the Wall Street Journal.

The bank worked with QC Ware Corp., a Palo Alto, Calif.-based startup, earlier this year to understand the limitations of current quantum-computing technology, said Paul Burchard, a managing director at Goldman’s research-and-development division. The company is now extending the partnership with QC Ware, according to the WSJ.

“We’re looking at various possibilities for applying quantum computing across the bank,” added Burchard.

This is the first time Goldman has announced its work with a quantum-computing services company.

No commercial-grade quantum computer has been built yet, but tech giants such as Microsoft Corp. and Inc.’s Amazon Web Services have announced cloud-based quantum initiatives in recent weeks.

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QC Ware uses the cloud to connect businesses with early-stage quantum-computing hardware providers including D-Wave Systems Inc., Rigetti Computing and International Business Machines Corp. The startup also helps enterprises develop quantum algorithms and applications.

Its other enterprise clients include Airbus SE, which sought the startup’s help in understanding how quantum computing could be applied to mathematical calculations in the design phase of aircraft systems and parts.

By harnessing the properties of quantum physics, quantum computers have the potential to sort through a vast number of possibilities in nearly real time and come up with a probable solution. While traditional computers store information as either zeros or ones, quantum computers use quantum bits, or qubits, which represent and store information as both zeros and ones simultaneously. Other fintech companies are exploring the use of quantum computing in financial processes.

In the coming months, QC Ware will help Goldman Sachs determine whether quantum computing could be used to speed up a computational algorithm known as Monte Carlo, according to the newspaper. The algorithm is used to calculate the theoretical value of an option, or a contract that gives individuals the right to buy or sell an underlying asset at a specific price and time.

These types of calculations can be time-consuming for traditional computers, which can take hours to compute option prices and risks for a large portfolio of complex trades.

Quantum-computing technology could also be useful in speeding up AI-based calculations that help determine trading strategies for clients, Burchard said. Theoretically, quantum computing has “some very attractive applications,” he said. But today’s quantum machines face numerous hardware challenges, meaning potential business value from the technology could still be many years away.

“We’re obviously making a bet that it’s worth it to get in now, early, and understand the technology sooner than later, but there’s a lot of uncertainty around the eventual timeline,” Burchard said.

QC Ware has received $7.5 million in venture-capital funding since it was founded in 2014. Goldman was the lead investor in the company’s Series A funding round last year, along with Citigroup Inc.

A Goldman executive said last month that when quantum computing goes mainstream, the financial-services industry could be the first to benefit because a quantum algorithm could be deployed to a new financial model in days or weeks, while approving a new material or drug discovered by a quantum computer is likely to take years.

“In the universe of industries where there is a potential quantum advantage, you could argue that finance has got the shortest path to impact,” Jeremy Glick, head of research-and-development engineering at Goldman Sachs, said at a quantum-computing panel event in Brooklyn, N.Y.

Matt Swayne

With a several-decades long background in journalism and communications, Matt Swayne has worked as a science communicator for an R1 university for more than 12 years, specializing in translating high tech and deep tech for the general audience. He has served as a writer, editor and analyst at The Quantum Insider since its inception. In addition to his service as a science communicator, Matt also develops courses to improve the media and communications skills of scientists and has taught courses. [email protected]

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