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Collision 2019 - Day One
Alan Baratz of D-Wave Quantum (David Fitzgerald/Getty Images)
quantum beef

Why D-Wave Quantum’s CEO was “quite disappointed” with Nvidia’s Quantum Day

“I expected it to be a bit more thoughtful and respectful,” said D-Wave Quantum CEO Dr. Alan Baratz.

Luke Kawa

Back in January, Nvidia CEO Jensen Huang made a bit of an oopsie. His comments that quantum computers were 15 to 30 years away from being “useful” sparked a massive sell-off in pure-play quantum computing stocks.

To try to make amends with the industry, Nvidia announced that it would be hosting a Quantum Day to discuss the industry’s progress, which was part of last week’s GTC.

There, Huang made another oopsie by revealing that when he made those remarks about quantum computing in January, he didn’t even think any of these firms were publicly traded. That’s despite Nvidia partnering with many of these firms on different projects.

We recently interviewed D-Wave Quantum CEO Dr. Alan Baratz, who runs a very real publicly traded quantum computing company, and asked him for his thoughts on how the event went.

His response:

“I was quite disappointed in how the panel that I was involved in went. I think that it was quite self-serving for Nvidia. I expected that, but I expected it to be a bit more thoughtful and respectful. I was surprised when Jensen said, I didnt even know there were public quantum companies. Seriously?

I was disappointed when he said, well, maybe quantum computers arent really computers, theyre just scientific instruments. Well, OK, if thats true, why are we computing the solutions to problems that cant be computed on your GPUs? I mean, I thought that comment was very kind of derogatory toward the quantum industry and self-serving for Nvidia. And so I just felt that the whole tone and tenor was dismissive of quantum computing and the quantum industry. And that was disappointing to me.”

In San Jose, Nvidia also announced that it would be building an accelerated quantum computing research center in Boston “in collaboration with leading hardware and software makers.”

D-Wave has not been invited to be part of that consortium. That doesn’t bother Baratz too much, though, since he expects the company will be ahead of the curve in pulling off what the chip designer is looking to accomplish, as D-Wave aims to integrate its Advantage quantum computer with a supercomputer in Germany in the near future.

From Baratz:

“We were not approached and yes, it was a mistake. But I’m not too concerned about it because frankly, we’ll probably be up and running with that integration capability at the Julich Supercomputing Center well before it will be up and running in Boston.

I mean, think about it, you know, Jensen is going to provide GPUs for quantum-GPU integration. That’s what we’re doing at Julich with 25,000 GPUs! That will be up and running in months. So no, we were not approached; yes, I think it was a mistake that we are not approached, because we’re quite unique in the quantum industry and I would think that if Nvidia was really interested in understanding how quantum and GPUs relate to one another, you would be interested in doing it with more than just one form of quantum computing. 

But we’re already marching down that path. We’re just doing it at a different facility.”

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AI server cluster maker Penguin Solutions takes flight

Small-cap AI server cluster maker Penguin Solutions surged Thursday after posting better-than-expected Q2 revenue and profit numbers Wednesday after the close, along with an increase in full-year sales and profit guidance.

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

The company, which was known as Smart Global Holdings until July 2024, has positioned itself as a provider of “end-to-end AI infrastructure solutions.”

Its Advanced Computing division designs and sells computers, cabling, and cooling systems, the server racks and clusters of racks AI data centers need. Its other main division sells flash and DRAM memory products.

It’s a pretty small company, with a fully diluted market cap of just over $1 billion and roughly 2,900 employees, according to FactSet.

The stock is volatile. Penguin dove during last year’s tariff tantrum that followed “Liberation Day” in April. Then it turned tail and doubled through early October amid a surge of call options activity, which tends to reflect retail interest. From the October peak, it then plunged by about 50%, before Thursday’s renaissance.

For what it’s worth, call options activity in Penguin is pretty busy today, too — relatively speaking — with roughly 2,625 traded as of 1:15 p.m. ET. That’s the most since early January, when the company last reported quarterly numbers. The average volume over the previous 25 trading sessions is about 325 calls a day, FactSet data shows.

markets

Momentum returns to optics stocks as the release valve for AI optimism

Potentially imminent end to the war? Buy optics stocks.

Maybe not? Buy optics stocks anyway.

Effectively all the juice left in the AI trade is coming from optics (and memory) stocks. And the latter group is taking a bit of a breather today while the former continues to surge.

Shares of Ciena Corp., Lumentum, and Coherent are building on recent big gains and among the biggest gainers in the S&P 500 near midday, while Applied Optoelectronics is also surging on Thursday.

These companies all provide solutions that help information move around in data centers, and thus are key beneficiaries of the aggressive capex plans of hyperscalers. Nvidia has invested $2 billion apiece in Coherent and Lumentum in deals that also include purchase commitments.

markets

Space stocks rip during a topsy-turvy day for the equity market

Satellite-services-from-space stocks surged Thursday after reports that Amazon is in talks to buy Globalstar, which provides voice and connectivity services from its satellite network. It also can’t hurt that the general mood around space is ebullient, following the successful launch of Artemis II on Thursday.

Planet Labs and ViaSat also soared on the news.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

The gains for EchoStar — seen as a backdoor play at pre-IPO SpaceX exposure — and Rocket Lab were more muted, perhaps because a deep-pocketed competitor like Jeff Bezos getting serious about space services could complicate the plans of the two largest commercial space launch companies.

Rocket Lab and SpaceX see launch services as key to their aspirations of being major providers of voice and data services from low-Earth orbit satellites.

Tesla CEO Elon Musk’s SpaceX is the dominant provider of such services, and the early rumors on the company’s planned IPO — expected to be the largest ever — suggest the market is very excited about the prospects for the industry.

Elsewhere in the space stock world, Intuitive Machines — a maker of space infrastructure that provides services to NASA for lunar missions — also rose.

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