Insider Brief
- SandboxAQ, a spinout from Alphabet, is reportedly seeking a new funding round that could value the quantum-AI software company at $5 billion, according to Bloomberg and TechCrunch reports.
- The company, led by CEO Jack Hidary, focuses on quantum physics-driven software solutions for sectors like healthcare, navigation, and cybersecurity, but is not building quantum computers.
- Investor interest in SandboxAQ is growing, with several special purpose vehicles (SPVs) set up to allow investors to buy shares in the company, reflecting the market’s confidence in its long-term potential.
SandboxAQ, an Alphabet spinoff focused on quantum-AI software, is reportedly seeking a funding round that could value the company at $5 billion, according to Bloomberg and reported by TechCrunch.
If true, this would be the second large fund raise in just shy of two years. The company raised a $500 million funding round in early 2023, supported by investors such as Breyer Capital and T. Rowe Price. The company’s current valuation is estimated at around $4 billion.
Led by CEO Jack Hidary, SandboxAQ was spun out of Alphabet in 2022. Hidary, a known figure in the tech industry and longtime X Prize board member, leads the company’s mission at the intersection of quantum computing and AI.
Despite its focus on quantum technologies, SandboxAQ is not developing quantum computers but instead builds software with advanced capabilities to, for example, model molecular behavior using quantum physics, as Hidary has explained in several interviews and talks. The software could one day work with quantum computers, such as the ones Google Quantum AI is developing, for example.
While generative AI and large language models (LLMs), SandboxAQ is taking a slightly different path to AI. The company promotes its Large Quantitative Models (LQMs), which are used for solving quantitative, equation-based problems rather than language tasks, can be used to address challenges in sectors like drug discovery, materials science and asset management. Its AI-powered applications are designed to transform healthcare and navigation, according to its website.
The startup’s technology spans multiple sectors, including life sciences, materials science, encryption and navigation. Its ongoing projects include a partnership with Novonix to extend lithium-ion battery life and a contract with the U.S. Air Force to develop GPS-independent magnetic navigation systems. Additionally, SandboxAQ is collaborating with U.S. hospitals to develop a magnetocardiography system for heart imaging, as TechCrunch reported based on Bloomberg information.
Former Google CEO Eric Schmidt serves as SandboxAQ’s chairman, which further establishes those critical ties to Alphabet’s leadership. Since its launch as an independent company, SandboxAQ has garnered significant interest from investors. TechCrunch reports that several investors have set up special purpose vehicles (SPVs) to purchase shares in the company. SPVs, which help isolate financial risk by holding assets separately from the parent company’s balance sheet, are commonly used in venture capital to pool investments or acquire stakes in startups, allowing investors to participate in specific projects while limiting their exposure to the broader company’s liabilities. As investment interest in AI startups like SandboxAQ has spiked, SPVs are used to allow investors to buy shares in these highly sought-after ventures.
This SPV interest in SandboxAQ could signal continued confidence in its potential, according to TechCrunch.
With a frenzy for AI companies and growing curiosity for quantum, SandboxAQ’s blend of quantum and AI technologies, coupled with its broad applications across various industries, is a dual-investment threat. The company’s focus on solving complex scientific challenges, rather than developing generative AI models, also distinguishes it from other AI ventures.
SandboxAQ did not immediately respond to requests for comment regarding its current fundraising efforts or future plans, according to Bloomberg and TechCrunch.
