Founder Story: Oded Melamed, CEO at Quantum Source

From Semiconductors to Quantum Breakthroughs: Oded’s Journey and Vision for the Future of Computing

Thanks for sitting down with us Oded. To get started, tell us a bit about yourself. What’s your background? 

Sure, happy to be here. I was born and raised in Israel, I have two granddaughters, and my wife is also an entrepreneur, she’s the CEO of a small startup called NitroFix. My background is in semiconductors, and I’ve been in this industry for almost 30 years now. I received my first degree in electrical engineering from Tel Aviv University. After I graduated, I joined the army and spent six years in the intelligence forces, where I also received my masters degree in electro-optics from Tel Aviv University. After I finished the army, I worked for two years at Motorola, which was enough time for me to realize that I don’t like working for big corporations. So after Motorola I joined a startup company called Libit Signal Processing. After two years, in 1999, we were acquired by Texas Instruments. I stayed at Texas Instruments for six years after the acquisition, where I ran the cable modem operation here in Israel, the key business for which Texas Instruments did this acquisition. I left in 2005 with two colleagues of mine and we established our own semiconductor company, Altair Semiconductor. Altair developed solutions for the IoT market.  The company was acquired in 2016 by Sony. I stayed four years at Sony until I left in the beginning of 2020.

With your M&A experience, what’s your best advice when it comes to a successful acquisition? 

It varies from acquisition to acquisition. It’s much easier for founders to stay in a company where no major changes are made. At Sony, it was pretty natural for me to stay and make sure the new home, shareholders and employees are happy, and that we’re growing steadily to the next phase because the changes made after the acquisition were minor. Also, we had a history with the acquirer, as Sony was a design partner. We knew the people and culture, so it wasn’t new to us.   When we had discussions with Sony about the possible acquisition, it was clear that only minor changes would happen to the organization, and that we’d be responsible for our destiny. We need to keep our P&L, marketing activities, and act like an independent company. I believe it’s more difficult if many changes are happening after the acquisition, but that was not our case. I can advise anyone thinking of doing an M&A to start the relationship as a partnership, work with the other party, and get to know the people before engaging in the M&A . This will give you a lot of insight into what the acquisition will look like afterward.

Okay, let’s dive into Quantum Source. With such an innovative product, what is the vision of Quantum Source, and what’s the founding story of it?

The story is very much related to Pitango, and I’ll tell you why. It was the year of 2018 or 2019, I believe, and Ayal Itzkovitz was evaluating investing in PsiQuantum. PsiQuantum is a photonic quantum computing company that today has raised more than $700 million. At that time, they were in their early rounds of raising capital, and Dan Charash, who is an entrepreneur with a rich semiconductor background, was sharing an office with Ayal Itskovitz as an entrepreneur in residence.  Ayal asked Dan to help him with the technical due diligence of evaluating investing in the company. Dan told him that it was beyond his capabilities, but he had a friend from his army period, a professor in the Weizmann Institute who is familiar with quantum optics. Professor Barak Dayan, one of Quantum Source’s co-founders, was the one who was brought in to support the due diligence.  Prof. Dayan came to two conclusions:

1. What PsiQuantum is trying to do is crazy, but with the right team and a significant amount of funding, it’s probably possible to do.
2. Barak understood the bottleneck in photonic quantum computation and believed he had a way to solve it.

So Dan, Barak, and some other team members started evaluating Barak’s idea. It took them time to analyze the possibility of using the technology that Barak developed in Weizmann to solve the largest bottleneck in photonic quantum computation. This was the basis for quantum source.

When were you brought to the table?

In the beginning of 2021, my Co-Founders Dan Charash and Gil Semo who I know from my background in the semiconductor industry, approached me asking for my advice on raising capital for such a company. They knew that I evaluated the possibility of having a new venture in quantum after I left Sony.  They shared with me the crazy idea they had. I will say that I was a bit skeptical. It took me several months to do my due diligence on the technology and its usefulness.  Once convinced, I decided to join the team, we established Quantum Source, and we raised our first capital.

Given that you had looked into starting a venture back in the day, what changed your mind to start it when the team from Quantum Source approached you? 

It’s a different modality. The promise that quantum computing will bring to the world is pretty dramatic. It’s estimated that more than $1 trillion will be contributed to the global economy once quantum computers are realized. The estimation is that it will happen within 10 years or so. So the question is, why wait 10 years?  The answer is that quantum computers today are small in terms of the number of qubits, which are the quantum bits, they are also noisy, and therefore their commercial benefit is limited. To unlock the potential of quantum computing, we need to employ error correction on the qubits and reach a certain level of error rate. This is why millions of qubits are necessary for interesting and commercially important algorithms. For reference, the state of the art today is quantum computers with about 1,000 physical qubits, so the gap is significant.

So, what’s the biggest challenge when it comes to qubits and building quantum computers? 

Qubits are the quantum bits that are represented by quantum elements. These can be quantum elements such as atoms, ions, or photons. Qubits are analog by nature, and unlike the classical bits that are represented by only two states  0, or 1, the qubit can be visualized as a ball with two poles, where the poles represent 0 and 1, and during computation, the state of the qubit can be anywhere on the surface of the ball. Once you measure the qubit, its state collapses to one or zero. There are many ways to represent qubits, but that is not enough for creating quantum computers. To build a quantum computer we need to create entanglement between the qubits and implement quantum gates. Entanglement means that each particle or qubit in the group cannot be described independently of the state of the others, including when the qubits are separated by a large distance. As mentioned before, the qubits are analog and they are noisy. Even the smallest change in the environment can impact the state of the qubits. Also, unfortunately, they don’t live long, so they lose their state. As you make the system larger, the noise in the system also increases. So it’s about finding a way to create large-scale quantum computers with a noise level that is reasonable to employ error correction. With photonic quantum computation, the scalability is easier because of their immunity to external noise and because they do not interact with each other. While that’s the benefit, the drawback is that because photons do not interact with each other, the entanglement process is becoming super difficult.  Today, companies such as PsiQuantum, generate the qubits and the entanglement using probabilistic processes, with a very low probability of success. Every photon in such a system is a result of millions of attempts, which is why the systems are so complex, require a lot of real estate, and require complex control mechanisms. A one million qubits system will occupy the space of a football court, will look like a semiconductor fab, and will require electricity like a small town. Such a machine will cost almost 1 billion dollars! Quantum Source technology is about 4 orders of magnitude more efficient. This means that the system can be smaller, cheaper, much easier to control, and more accessible to enterprises and governments. This is the motivation behind establishing Quantum Source — the ability to build efficient large-scale, fault-tolerant quantum computers.

What makes Quantum Source’s technology unique from other existing technologies in the industry?

Current technologies use probabilistic processes to generate the qubits and to create the entanglement between the photonic qubits. Our technology can generate the qubits and entanglement in a deterministic way, not probabilistic. We do it by combining two different qubits, photonic and atomic qubits. This process improves the efficiency of the system by about 10,000 times.

So this technology is the reason you decided to go ahead with Quantum Source, instead of the initial venture back in the day? 

Yes. This venture, although riskier compared to “traditional” approaches, has the potential to revolutionize quantum computing. Once we are successful — we will unlock the quantum computing benefits.

Once the potential is unlocked, tell us, how will Quantum Computers change our reality? 

Quantum computers will not be a replacement for classical computers. Quantum computers will be accelerators for certain types of algorithms that can leverage the uniqueness and benefits of the interaction between qubits. So far, there are several areas where quantum computers can bring significant benefits. For example, the development of new drugs or new materials. Today, if you want to develop a new drug, it’s a lot of trial and error. There is no efficient way to simulate certain molecules and to simulate the impact of this molecule on certain targets within the human body. With quantum computers, this would be possible and it will accelerate the development and the time it takes to bring new drugs to the market. Another example is the development of new materials. Again, simulating new materials is almost impossible with the classical computer and quantum computers can do that. Also, many optimization problems for logistics and even financial markets require a lot of computational power, and can’t be solved in a reasonable time using classical computers, and quantum computers can make the difference.

Because your product is so visionary and futuristic, how do you keep your team motivated towards something that they can’t necessarily see just yet?

In my previous life, it was much easier because you see the product. The product is always two or three years down the road and you have continuous interaction with customers. So creating motivation for the team is easy. Here, we are generating motivation a bit differently. The technology we develop is unique, no one in the world is doing something even similar, so every step in the accomplishment is exciting. It’s something that people are proud of.  Most of our employees have a PhD in physics, mathematics, or electrical engineering, so they are super motivated by scientific achievements. Having said that, we always need to show them the long-term vision because, at the end of the day, we need to deliver a product. So while scientific achievements are incredible and important, we always need to talk about the product — what the product will look like and what are the challenges of the product.  It’s about combining the short-term technology development or the science with the long-term vision and engineering aspect of the product.

Are there any current challenges with regulations when it comes to working with governments in this sector?

Currently, there are no strict regulations around quantum computing. They’ll come once quantum computing is more advanced.  The technology is at the stage where the available quantum computers can’t do any harm, and its benefit is currently very limited. Technology development is important and governments are not imposing any significant restrictions so far. But once the technology is realized and large-scale fault-tolerant machines are available, restrictions and regulations will be imposed. This is a machine with huge strategic value, and every country will be interested in keeping the highest value for its use. Currently, governments have a great interest in quantum computing technology and many of them are investing large amounts of money into the development of quantum computing. There are two interesting examples, both related to a PsiQuantum. 

1. The Australian government invested about $600 million in the development of quantum computers based on PsiQuantum’s solution.
2. The Illinois government established a quantum hub south of the city of Chicago, in the Michigan Lake area. They plan to invest $500 million in creating a photonic quantum computer center based on PsiQuantum technology.

This gives you an idea of their interest in quantum computing

To wrap up as a final question, if you could give one piece of advice to founders to help them succeed, what would it be?

Choose the right partners. Entrepreneurship is a long journey with many ups and downs, and you need the best partners around you to be successful. The right partners doesn’t mean they need to be the best scientists, they need to be the best partners. People you can trust that they will not break when it gets tough, and it will get tough eventually.  To summarize, your partners and team are the most important assets for an entrepreneur.