Lead-Lag Live | Christopher Gannatti, WisdomTree — The Quantum Computing Investment Case | WQTM ETF

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Transcript

Going Live And Setting The Stage

SPEAKER_00 0:01

Yeah, yeah. No, that's all it's all good, yeah.

SPEAKER_01 0:03

Alright, folks, give me a second. Uh we should be live. Uh so I'm just checking in case we aren't live. Uh in which case Macy sing this is not gonna matter. Just bear with me, folks. I'm gonna go on X. Uh hopefully uh those that are on X watching this uh appreciate some of the humor they've been bringing through my timeline today and uh some of the interesting things I've uh some big names I guess I've been engaging in some of the posts that I put out yesterday, uh especially when it comes to Bitcoin. Uh but anyway, uh this should be a good conversation. This is the first time I'm actually uh talking to somebody from Wisdom Tree, which is a uh obviously a very large firm. I've known the folks at Wisdom Tree for some time. They have recently engaged Lead Live Media for some of this kind of uh exposure. And uh this is gonna be a topic I actually have not done a podcast on ever, which is quantum and quantum computing. So uh I'm very excited for this personally. Uh if you're watching this on X, uh LinkedIn, or YouTube, it is live, which means if you want to ask any questions, you know, I can see your comments on whatever platform you're posting on. So feel free to uh you know to engage with that, and I'll try and bring it up. And uh as always, I appreciate the support from those that have tracked my work and tracked the uh types of other thought leaders I bring on to this uh stage.

Meet WisdomTree And The Quantum Focus

SPEAKER_01 1:14

So with all that said, my name is Michael Guy. I am the publisher of the Lead Lag Report and founder of Lead Lag Media. I've got with me Mr. Chris uh Gannati, and I was just saying, you know, what's the what's the proper title for Chris? And he he kind of like told me a title that was a pretty big title. I was like, uh, that's a that's a big title. Global head of research. Is that is that what it was? Like it said Yeah, yeah, yeah.

SPEAKER_00 1:31

No, it's uh it's a nice, it's a nice title. So yeah.

SPEAKER_01 1:35

It's better than portfolio manager, especially when your portfolio is not doing as well as you hope they would. Adam Stuffle. And if you know, that's uh you know, I'm a phone manager myself. Uh all right, listen. Uh so Chris, first time you're you're on a uh a podcast, I guess, uh with me. Um introduce yourself to the audience. Who are you? What's your background to be done throughout your career, and talk to me about what you do with Wisantry.

SPEAKER_00 1:52

Sure. So uh started with Wisantry all the way back in 2010. Uh been with uh Jeremy Schwartz, our uh uh global CIO for that full amount of time. Uh Jeremy Schwartz works with uh Professor Jeremy Siegel, who's been associated with the firm all the way back throughout its uh entire history. Uh this this year is kind of an interesting year for Wisentry in that uh, you know, we launched our first funds in 2006. So uh it's the sort of 20th year of uh live ETFs in market uh for WisomTree, which is uh fascinating. And if you had told me uh back in 2010 that I'd be talking about quantum computing in any context, podcast or otherwise, I would have said, you're absolutely nuts, you're crazy, uh it could never happen. And yet uh here we are today. Globally, WisomTree is an asset manager where we probably have between 400 million and 500 million. Again, depending on the day the market moved, it's a volatile topic, but 400 to 500 million in total global AUM specific to quantum computing. So it's not a small or a niche uh area for us, it's becoming uh a bigger and bigger focus.

SPEAKER_01 3:10

Okay,

Quantum Computing Basics And Superposition

SPEAKER_01 3:11

so I kind of feel like we we should uh go very basic in the beginning because a lot of people throw terms out and they don't actually know what those terms are.

SPEAKER_00 3:20

But I try try to know what they are, but yes, I'm not exactly what you mean.

SPEAKER_01 3:23

Yeah. It's like we I always go back to like you gotta you gotta you gotta level the playing field as far as what someone's so what is quantum computing?

SPEAKER_00 3:32

So qu quantum computing is something it it goes all the way back to essentially around 1980. Uh, if people have heard of the name, uh Richard Feynman, famous uh physicist, was involved uh with Oppenheimer on the Manhattan Project, was involved in in numerous things, won a Nobel Prize. And one of the statements that he made, he made it at various points, but um I sort of found an instance where he made it in uh around 1980, which was if you wanted to truly simulate chemistry, meaning you have we have all these atoms, and and this is important, for instance, if we're trying to think of proteins, if we're trying to think of medicines, drugs, therapies, virus particles, bacteria, simulating a cell, all this stuff that we would love to do. Because if we could do it more accurately, it might mean either we can prevent a disease, cure a disease, help somebody fight cancer, all this important stuff that we would love to do. But if you if you truly want to start simulating how the electrons are reacting and moving and going up to different energy levels and down to different energy levels, there's no way that a classical system, and when I say classical system, that's an example of a classical system is NVIDIA Vera Rubin. So you hear Jensen Wong talking today about the systems they're delivering to data centers. Uh, the the uh Blackwell 300 is one example of those uh systems. Vera Rubin is sort of the upcoming example. These are classical systems, but there's so much information and variation and variability in these electron clouds, especially for larger atoms and larger molecules, you can't possibly store and accurately simulate all of that to a high enough degree of fidelity. And so a quantum computer is taking advantage of quantum mechanics and basically saying instead of having all of your computations based on either a zero or one, sort of the binary code which underlies even this video that we're doing right now, you can reduce it all the way down to just a series of zeros and ones. It makes you really appreciate what these different uh software engineers and programmers have done over time. Because I admit, I can I can't sit here and say, oh my gosh, uh what are what's the exact sequence of zero and ones that creates a video and allows us to do this or allows us to do that? But the the quantum system, when you can put these particles into superposition, what it allows you to do is take advantage of everything between zero and one. So it's sort of an infinite number of states.

Shor’s Algorithm And Why Encryption Matters

SPEAKER_00 6:09

It allows you to run through certain kinds of calculations, not every kind, but certain kinds of calculations in a way. One of the most famous uh examples is called Shore's algorithm, where you basically say, I have these giant numbers and I want to find the prime factors. Why is that important? Well, there are certain kinds of encryption, like RSA uh standard 2048, which is based on I have these giant numbers, hundreds of digits. And if I can properly guess the prime factors, I can break the encryption. I can see information that I shouldn't otherwise see, banking information, other type of information, secret information that I shouldn't see. And so Shore's algorithm, it was written up probably in 1995. But what we're seeing now is progress towards an actual quantum system, a quantum computing system that could, and they estimate maybe around 2029, 2030, there could be a system that would be able to keep enough of these qubits in superposition long enough to run Shore's algorithm. Why is that important to know? Well, it's it's important if you have any information that depends on safe encryption, such that the people who are supposed to see it see it, and the people who aren't supposed to see it don't see it. Uh, there are quantum safe standards and all of that, but that is probably the key headline. Uh, it'll probably be written up a few times each week as we go forward for the rest of the year, this idea of quantum computing and what it may or may not uh mean for safety and encryption.

Bitcoin Fears Plus Quantum Safe Standards

SPEAKER_01 7:45

All right, so so help me out on this because I'm gonna play the the the uh scared out of my mind uh uh podcast host here. Um you hear you hear these arguments that uh maybe this is actually why crypto is not doing so well. There's concerns about you know quantum at some point breaking the encryption, the protocol, uh Bitcoin in particular. But um whenever that's uh put out there, uh the counter is well, if that's the case, then like we're all in a bad position because you're J Chase account. You can't I mean everything's everything's a risk, right? Yeah. So I mean it that seems like a like a weapon of mass destruction to some extent.

SPEAKER_00 8:22

It it is a very powerful tool that we can basically guarantee every government around the world uh knows about these uh potentials. Uh that the one one of the statements I always make is there's the quantum efforts in funding that we hear about. Like, for instance, uh about two weeks ago from sitting on this very podcast, we saw the US government uh make a commitment across nine specific quantum computing companies. And it's it's an amazing signal to see the government making such a commitment. So that that's unequivocally positive. But then you see the dollar figure and you say, oh, it's two billion. And two billion to me is a lot of money, but two billion in say the face of what the world is currently spending on AI this year, not even the world, just probably four or five gigantic companies. They're probably going to spend 730 billion uh just to essentially build AI data centers. So you have two billion, and then you have 730 billion. And then you'll hear, you know, China might be spending 10 to 15 billion and the UK might be spending a few billion. But I almost think of it like the iceberg because you're you're exactly right from a perspective of every government knows what is the value, similar to if you think of the movie The Imitation Game, where uh Alan Turing's character played by Benjamin Cumberbatch uh essentially has the machine and it figures out the Enigma code. And what do they do? They sit there and they can read all the messages that the German army was sending, and then it allows them to intercept certain things and to have a whole different strategy of how they're fighting World War II at that time. The value of just being able to see all of the anime communications. This is basically a version of the same thing. Now, before you get too afraid, though, there are quantum safe encryption standards. The National Institute of Standards and Technology has published there are three official standards. These aren't the only standards, but these are this is what the U.S. government has published. They've had this out since 2024. I am certain that the giant banks around the world, the globally systemically important banks, they know about this, they have strategies. So you you wouldn't want people thinking, oh, no, nobody knows about this, there's no strategy. There is, there are absolutely strategies. There are encryption standards. People can adopt those encryption standards, they can take steps. I know in the crypto world, it's not the easiest thing to shift a protocol because it's a bit decentralized, and that's part of it. But at the at the end of the day, don't sit here thinking there's no solution and there's no answer. There are different kinds of math that the quantum computer cannot do as easily, even if, yes, factoring prime numbers, there are ways it can do that kind of math.

SPEAKER_02 11:12

But those standards are are are they're voluntary, right?

SPEAKER_01 11:15

So um it's like I I would make the assumption that China is not gonna care about that.

SPEAKER_00 11:20

Well, they're there so China's gonna have its own stand. So you're absolutely right. From an adversarial standpoint, uh everybody's gonna have their information, and then everybody else is going to want to say, oh, well, we have a bit of a geopolitical rivalry. Let's let's uh put a nice stin on it between the US and China. That that absolutely exists today. And you can rest assured, they would love to see all of the government communication between the Trump administration officials, for example, and just like the Trump administration officials would probably love to see all the communication between President Xi and everybody else. And so, similar to what has probably been going on uh tails all this time, uh, the US government has its offensive cyber capability, as do all the other governments, and they're probing and testing and trying to get into different systems. So, in a way, a quantum computer would just simply represent yet another tool in the toolkit. So if the NSA had such a capability or if China's government had such a capability, who knows if they would even tell us? Who knows if we would even know about it? But at the at the end of the day, uh they're certainly not gonna be motivated to adopt our standards and they're gonna hope that we are slow to adopt our own standards, but they're gonna be trying to encrypt their information. So everybody's gonna be trying to encrypt their own information and and get into their adversary's information, but we we can rest assured that this is no different than probably what happens all the time and has been happening all the time, just with uh a different set of tooths.

Cybersecurity Reality Checks Beyond Quantum

SPEAKER_00 12:56

I mean, Anthropic released uh mythos uh a few weeks ago, and that's probably something even more near-term in the sense that we we sit here and we like to think our software is secure. And uh the mythos announcement, at least some of them, uh, seems to indicate, okay, uh software that you use all the time and you thought was secure, maybe maybe isn't as perfectly secure as you think. I don't think there is perfectly secure uh software. So we're at this sort of interesting point where the importance of cybersecurity, the importance of good cybersecurity discipline and health is only increasing, whether it's because of something like Mythos, which is classical compute based, but still important, or whether it's something like a quantum computer, which currently doesn't quite exist. But again, companies are estimating 2028, 2029, 2030, it could very well exist.

SPEAKER_01 13:49

Uh just to prove that we're on air to uh Mr. Marky T Sr. Stonk market commentator. Yes, we do respond to live comments on air. So if you want to ask the question, I'll bring it up here. Um what what what's the more important race from a geopolitical standpoint uh to win? The

AI Versus Quantum In Global Rivalry

SPEAKER_01 14:06

AI race or the quantum computer race?

SPEAKER_00 14:10

Probably today, the AI race is more immediately impactful. And again, we can only comment based on what we know. I admit I don't have top secret clearance. Obviously, if I did, we couldn't be bringing that up on a live uh podcast. But uh, at at the end of the day, artificial intelligence, and we're seeing the impact of artificial intelligence live in certain battlefield conditions. Uh those conditions could relate to Iran, they could relate to the Russia-Ukraine conflict, they relate to how you know drones are used and deployed as merely one example amongst many. Uh, and so artificial intelligence is here now, it's usable now, it can have an impact now. Uh, quantum computers, at least what we know in the in the public domain, uh in theory could be extremely powerful and extremely important. But when I say in theory, what that means is we've seen the results of certain experiments, we've seen certain commercial grade machines doing interesting things. But since the full commercial grade, fault tolerant, error-corrected machine is not fully built and not yet able to do things that the classical computers cannot do, the world of AI today is more powerful. I would indicate the key rivalry right now between China and the US comes down to semiconductors, and the US has a bit of an advantage, obvious reasons, and rare earth uh minerals and metals. Uh, China has today the processing advantage in uh rare earth uh metals and minerals. And frequently what you see, you saw it last year. I wouldn't be surprised if we saw a few things uh this year where China does a few things related to rare earth metals and minerals. The US might or might not do some things related to semiconductors, and that currently is the uh grounds of rivalry. But as we know, things can change.

SPEAKER_01 16:15

We're gonna

Quantum Supply Chain And Superconducting Chips

SPEAKER_01 16:16

talk about the investment uh implications here in a bit, but um, talk to me a little bit about how the supply chain on the quantum side looks or works. I mean, I don't know what's I assume it's similar to the AI semiconductor side of things, but maybe it's not.

SPEAKER_00 16:29

It it it depends on modality. And when when I say modality, it's again one of those words where in the quantum computing world, when you say qubits and when you're indicating a certain company, like if you're indicating Google, IBM, or Rughetti, these are three companies that each have their own quantum computing effort. And the question that's very logical to ask is how are they controlling, managing, and creating their qubits? They're using superconducting qubits. Superconducting qubits, and this got a lot of attention because IBM is taking the billion dollars that they got from the US government. They're uh putting their own matching billion dollars and they're building uh a facility. It's referred to as the Anderon facility. You can look it up online, it's indicated. And what the Anderon facility is actually doing, when you when you sort of look under the hood and you say, why do they even need a facility? Well, they are making superconducting qubit chips, which what that basically means is it's gonna look, if you've ever seen uh a semiconductor, it's the circular uh disk of silicon where it reflects the light in a certain way, almost looks like a solar cell. And what is different about these chips that are cut and manufactured in much the same way is there's a bit of niobium metal. That's the specific metal that goes on the chip. And the reason that that metal is important, it's not important if I held it in my hand in this room right now, because this room is probably about 70 degrees uh Fahrenheit. But what you see when you can you can Google, you can look up the IBM actual quantum system. It looks like a giant refrigeration unit. Uh, frequently you see the gold coming down from the ceiling with all the tiny little pipes. What that system is doing, and the bulk of it and a lot of the energy that goes into that system is you're taking a specific isotope of helium, you're cooling the system down to a temperature that is close to absolute zero. It's actually colder than what you would experience if you went up in a SpaceX rocket. I know that IPO is one week away. You go up in a SpaceX rocket, you go out into outer space. It's extremely cold out there, and there's nothing because it's space, but the temperature in the IBM system is actually colder in degrees Kelvin than even what you would have in space. The reason you have to do that is if you have any disturbance, and temperature is really just the vibration of atoms at the end of the day, any vibration, any disturbance, any cosmic ray, x-ray, anything, it messes up the whole calculation. The calculation is extremely, extremely sensitive. But you basically think some of these qubit modalities depend on a supply chain that looks very similar to making silicon semiconductors. Obviously, the neobium metal is a difference, but by and large, one of the reasons why the superconducting modality is viewed to be sort of the long-standing uh champion modality. If you had to predict today which modality might be the quote unquote winner and get to the full-scale quantum system that's fully error corrected first, uh superconducting is not a bad bet. Uh a lot of time has been spent and it's not something to sneeze at that you can use that that similar supply chain that you would have with, say, uh semiconductors.

SPEAKER_02 20:06

Okay, so let's talk about the the arbitrary

Real Customers Today With Optimization Use Cases

SPEAKER_02 20:10

with this.

SPEAKER_01 20:10

And um from an investment perspective, going back to your point about the government side of things, it it it doesn't seem to be like maybe I'm wrong, that we'd have uh uh the average uh uh Joe, you know, Joe Six Pack, going back to that uh now uh having a quantum computer at their house, right? So this is gonna be large. Probably not, yes. Probably not so I asked that from a perspective of you know, what's the revenue up to tree? Like who are the buyers? How does how do these companies actually make money?

SPEAKER_00 20:39

So there's a a great company that exists today, D-Wave. Uh it's it's another company that was on uh the government's there. There were nine companies on the government's list. DLA D-Wave was one of the companies on the list. Um, the the reason that they're a great example to go to is they've been running a specific process called quantum annealing, which is a is a bit different, but we won't go into exactly all the nuances and differences. But suffice it to say, there are actual customers that go to D-Wave today to help solve certain issues. And an example of an issue that is sort of a famous optimization problem. If people think of the traveling salesman problem, this concept that I've got a series of destinations I've got to get to. And if you if you don't want to think in an abstract, you could think I'm UPS. Uh so you think of all the delivery trucks that UPS has in a given city uh and recognize, okay, I need to make these deliveries in this amount of time. And I want to know the most efficient route that I could possibly take for all the trucks combined so that I use the least amount of gas, uh the least wear and tear on my systems, the the drivers are spending the least amount of time in traffic. You know, I've got all these variables I'm trying to manage. And if you used a classical computer, it's not that you would get a horrible answer, but the Depending on the approach that you take, sometimes what happens is the system is trying to optimize so many different things. It gets stuck in what's known as a local minimum. And you wouldn't know if that answer is truly the best answer. You would just know that, okay, the system kind of got stuck. It computed for a while and it got stuck in this area. And it's a decent answer, but I don't know if it's the best answer. The quantum annealing approach is going to give you the better chance at actually getting the ideal answer. And there are a lot of problems like that where you have all these variables. And what you're interested in is what is the best way that I can optimize given I really care about this, this, this, and this, but I recognize I also have to think about these 15 other things. So optimization problems are things that there are customers today that do go to D-Wave, that do get reasonable answers, that do get value. And so even today, there are some customers for quantum computing, even if what's not yet happening is you're not, you know, fully simulating the interaction of drugs or the interaction of cells with different things or running protein synthesis. You're not quite doing that yet on a quantum computer, at least in full. Another thing to always have in mind is there's going to be a lot of interaction between a classical system and a quantum system, where you're right that a regular person or really even a regular business is not going to have the on-premises quantum computer. That would probably make no sense. But what you would have, and this is already possible today, you can be an AWS, Amazon Web Services customer, and you could say, I'm interested to try out something in the quantum world on the Amazon bracket system, which is a real system that does exist and it gives you access to Ion Q and Regetti and D-Wave and other available systems. Uh, and you are able to experiment and test out certain algorithms and approaches so that maybe in 2028, 2029, 2030, you're more than ready to do it. So I would imagine a lot of the way in which people will interact with quantum will feel and look similar to how they interact with cloud computing today.

SPEAKER_01 24:15

So you've got this uh this ETF, WQTM.

Global Quantum Value Chain And WQTM Exposure

SPEAKER_01 24:19

And I'm looking at Z on my other screen here on at the uh at the weight waitings and the country allocation. So uh it's 62% is US. So obviously the quantum play is not just a US play. Uh talk to me a little bit about sort of the um the the international investment opportunities in quantum.

SPEAKER_00 24:34

So so frequently uh when you're you're thinking of the global supply chain, because it's uh you you you've got some of the qubit companies. When I say qubit companies, the peer plays, I'm thinking largely of ion q, regetti, d-wave, xanadu, which is actually Canadian. So there are specific quantum computing companies uh in Canada. Xanadu is one that is currently publicly uh accessible. Uh there are uh companies in Europe uh currently private. So we we don't have uh you know peer play qubit-oriented companies currently uh in the European market, but that that can always change because there are companies and efforts over there. And those what we've been seeing a lot this year in 2026 is we've been seeing a lot of companies that had historically been private transitioning into the public markets as we do this recording and as we speak live, even uh Quantinuum uh just went public uh only yesterday. Uh, but you're absolutely right to note that okay, uh the qubit makers, uh those kind of companies are largely US. Uh the hyperscalers, which are platforms through which you can access uh quantum computers, those are also uh largely US. Um, but then you start thinking about uh companies like uh Nokia. And in in my research, one of the interesting things about a company like Nokia, uh, which is involved in quantum communications, quantum networking, is if people are uh appreciative of history, uh Bell Labs is a very famous uh endeavor uh that existed in the United States and transistors, which are the sort of foundational building blocks of classical computing. I mean, there you think of uh one of the NVIDIA chips uh today, and there's hundreds of billions of transistors that sit on the chip. But somebody working at Bell Labs essentially invented uh a transistor. They used to use uh vacuum tubes uh and other mechanical things to do computing. So the transistor wasn't something that just existed forever and ever. It was kind of the 1950s and 1960s. A lot of developments were happening. Uh, a hotbed of innovation was, in fact, Bell Labs. And there was a purchase of, I think it was Alcatel Lucent, which had Bell Labs at the time that was purchased by Nokia. And so Bell Labs, or at least what currently is Bell Labs in 2026, is actually owned by Nokia, uh, a non-US company. Um, there's the companies, uh, there are companies like uh Hitashi, Fujitsu, uh companies that are largely involved with sort of the the infrastructure and recognizing that quantum computing is not just qubits. Like we can we can't just think of it as I make qubits and that's it. Uh you have to think of the refrigeration units, you have to think of the optical connections and networking, you have to think of uh the companies that are able to manage uh the power flow, the electron flow, the photon flow in very, very, very precise ways. The name of the game in quantum is largely precision and a degree of precision that is basically unmatched in almost any other discipline. And when you lose that precision, what happens? Well, the superposition, which allows you to exponentially speed up certain kinds of calculations, suddenly you just get garbage results. It becomes a garbage in, garbage out problem. And so there are a lot of very interesting optics companies, laser companies, all kinds of different companies uh that end up as part of the exposure, even if what we think of as the main part of the exposure are the pure play qubit makers. Because our thought is when people come to a quantum computing fund, first and foremost, they're probably thinking about qubits. And then secondarily, they're recognizing, as we as we discussed earlier in this call, the idea that it's not just qubits, it's also uh the rest of a very healthy and very important value chain that makes up uh the segment.

SPEAKER_01 28:49

It's gonna be that um in WQTM, again, the Wisdom Tree play on quantum here, uh, you've got Microsoft and Intel at relatively small rating uh readings. Um and obviously D Wave, as you said, is is you know number one, Regetti, uh IO and Q. Um how how involved are Microsoft and Intel on this?

Microsoft’s Topological Bet And Majorana Debate

SPEAKER_00 29:09

I'm I'm glad you asked about uh Microsoft because it was uh it was two days ago on um or three days ago on the 2nd of June. Uh they put out a paper. Uh my Microsoft, if if anyone uh goes into their large language model choice and basically creates a prompt that basically says, tell me about the history of Microsoft and quantum computing, you're gonna get a very surprising result because you're probably expecting what they could possibly be doing in quantum computing. They have Azure, they have Windows, they have all this stuff. What could they have been doing in quantum? And they go back 20 years of effort in the space, and they're essentially taking the divergent path, the main path, things like superconducting qubits, trapped ion qubits, neutral atom qubits, and photonic qubits, those are the four main ways that the companies are saying we think we can make and control and run interesting and important calculations using qubits with these modalities. Microsoft is way over here basically saying, no, no, no, no, no. There's something called the Majorana Fermion, and this is named after the physicist Attore Majorana, who worked with Enrico Fermi. And this guy famously postulated the potential existence of a specific particle in 1938, and then he disappeared. And I'm not kidding. He literally got on a boat uh from the mainland of Italy, I think he was heading to Naples. Nobody ever saw him again. But since 1938, this concept of Majorana fermions, which are sometimes referenced in Microsoft's work as topological qubits, Microsoft is basically saying if we can make and control and manipulate qubits in this methodology, which is not a guarantee. And in 2018, there were some uh retractions that had to have been made in nature or science and things of that nature. So it's not it's not been a clean or easy road. But if they can get this done, the whole idea of error correction that everyone else is focused on goes out the window because this approach would be inherently many, many, many orders of magnitude more stable relative to those other approaches. So the other approaches look like they can be done, but you have to control massive amounts of errors. Microsoft's approach, it's an active debate. And they published on June 2nd, three days ago, a new paper indicating they had made some progress. They haven't solved everything, but they made some progress. And it's an active debate in the physics community. Can they actually do this? Do the particles actually exist uh in a way that you can use in a quantum computer? These questions aren't figured out yet, but we're not looking at Microsoft spending the last few months on this. When Microsoft is putting out work, this is representing where they've come over a roughly 20-year period. So I personally never never sleep on that, and I respect it. And and look, none of us know the final answer. So I respect the fact they're taking a different approach. It may work out, it may be amazing, but like any of these other approaches, it may take longer than expected, or it simply may not be possible. None of this stuff in quantum computing is guaranteed.

SPEAKER_01 32:34

Uh

Why Use An ETF Plus Where To Learn

SPEAKER_01 32:35

just like performance is not the guarantee. Um okay, so so maybe in the final minutes here, um talk through to me in the audience what's the case for playing the quantum theme through an ETF like WQTM as opposed to somebody wanting to do some some stock picking.

SPEAKER_00 32:57

Absolutely. So obviously, if if you knew what the right company was ahead of time, uh, and I admit I don't, but if you knew what the right company that was going to win this race uh was, of course, you buy that company, uh, put all the money in there and forget about it. Now, because we don't know that, we're diversified. We're diversified across the qubit makers, the giant platform companies, the companies that do optical networking, the companies that are making some of the dilution refrigerators, the companies that are making certain kinds of software. The reason you diversify is you're sitting there saying, I recognize it's a highly uncertain space. Now, a lot of us are paying attention as as we sit here on June 5th to the SpaceX IPO uh that's coming up. And you're seeing so much in the news about XYZ firm in venture capital is going to make so many tens of billions, hundreds of billions. But one of the things I I never let myself forget is the people who are walking away with tens or hundreds of billions, what was happening when they were investing? It wasn't SpaceX is this amazing company that has all these satellites and everything. Like at certain points in SpaceX history, the rockets couldn't even get off the pad. They were exploding. We we the idea of landing a rocket from from space and recycling it was totally crazy. I mean, they couldn't even, they could barely get off the pad. So there's always that moment in a lot of these technology companies that we take for granted, once they're largely viewed as successful, that, oh, it was it was a foregone conclusion. And in reality, those people that we might look up in the clouds at that, again, are walking away with a billion dollars, $10 billion, $100 billion like Peter Thiel and the like, they're making some of these investments when it is far from certain that the effort or the technology is fully going to work out. So when you look at these quantum companies, it is not certain when the computer will be built, if all the modalities will actually work. But at the same time, if you deal with that appropriately and properly, it could be a very interesting way to think about a new technology that you can get closer to that quote unquote ground floor. And if it does work, it could be very exciting for the portfolio. And you can recognize even this year on World Quantum Day, there were certain announcements. Uh, two weeks ago, the US government made announcements. On these days, some of these stocks are returning 20 plus percent. It's it's an uncorrelated vehicle because whatever is happening at the Federal Reserve, whatever's happening uh, you know, in the in the government, whatever's happening with the Iran uh situation or the Russia situation on those days doesn't matter because there was an uncorrelated scientific announcement or government announcement specific to this space that affected this space on that day. And so when these advances come out, you don't know when they're gonna come out. There may not be any for the rest of the year. There might be one per week for the rest of the year. So you're you're getting something that is highly differentiated to the broad market. You're getting something that's at an earlier stage of its development relative to the companies that are already obviously successful, you know, the ones that you you see frequently in AI, the memory chipmakers, the companies like NVIDIA. And ultimately, the interesting thing is some of the best options, meaning companies in the space, look and feel something like an IBM, which is a company that's been around 100 years plus, but at the same time, it it almost allows you to, in a lower risk way, take an interesting exposure to quantum computing, because obviously IBM has an existing, current, strong business. But if their quantum computing effort works out, and IBM, the nice thing about what they do is you can go to the IBM website, you can see what they plan in 2026, 2027, 2028, all the way up to 2029, when they believe the full quantum computer with error correction is actually going to be running and is actually going to be built. Now, that's not a guarantee it happens, but the nice thing that IBM has done is they've put in public here are our targets, similar to like a sports team uh going into the World Cup. Here are the teams we have to beat to get the job done. IBM is saying, here are the engineering challenges that we need to solve on the bulletin board. If we get these things done in 2029, it could be a heck of an exciting year. And so to be able to take that kind of risk exposure to a new technology with a company that's been around for 100 years plus, that that was just sort of uh stamped by the government as the the leading uh getter of funds, they got 1 billion out of the 2 billion total that was announced two weeks ago. It's it's a very interesting time in this space, even though you're absolutely right. Has the machine fully been built? Have we solved every question? Absolutely not.

SPEAKER_01 38:00

Uh Chris, for those who want to learn more about uh the fund and some of the other offerings that WisdomTree has, uh, where would you point to?

SPEAKER_00 38:07

So WisdomTree has a blog. I am a prolific contributor to that blog. So any sort of WisdomTree fund, Wisdom Tree investment strategy, you will see it on the blog. And if someone is sitting there saying, I want to go deep on topological qubits, for instance, that's again what Microsoft is doing. Something that I do and WisdomTree allows me to do is I have a sub stack. So if people are wanting to go deep into some of these very specific and highly technical quantum topics, I try to do it. I'm trying to learn as I go, given I don't have a PhD in quantum physics or anything like that. So I'm trying to learn as much as I can about these very interesting areas and publishing what I learn on Substack. And then again, wisdom tree investments, wisdom tree strategies. You you go to the WisdomTree blog where I'm writing about artificial intelligence, rare earth metals and miners, drones, robots, quantum computing, writing about all these topics all the time.

SPEAKER_01 39:10

That's a uh good place to wrap up this episode of Lead Lag Live, which again, folks, was indeed live. I will edit this as a podcast, and you'll hear it on Apple, Spotify, and all your favorite platforms, hopefully by next week, with one of my AI agents doing that work uh because I'm just enormously busy. Uh, but very interesting conversation, Chris. I think you're a wealth of knowledge, and I um uh wish you guys all the success with the fund. I've actually got some good flows, 200 plus million in the UM from what I could see. Uh everybody learn more at Wisdom Tree's website, and we'll see you all on the next episode. And hopefully, uh quantum computing will not break this stream.

SPEAKER_02 39:42

Excellent. Appreciate everybody joining. Thank you. Give me a second, Chris here.