The Quantum Revolution: An Insider's look into the future of quantum technology with Sergio Gago

In an intriguing conversation, we covered various topics, including Moody's quantum ambitions, potential use cases within the financial industry, and the potential for commercial adoption. We also delved into the political nature of the space and touched upon how security concerns and rampant hype affect the industry.

Sergio Gago is the Managing Director of Quantum Computing at Moody's Analytics. He has amassed over 20 years of experience in the technology sector, with diverse roles such as CTO, general manager, and entrepreneur for a mix of startups, scaleups, and corporations.

Gago will appear at Quantum.Tech in Boston on April 25. He will appear alongside Rigetti Computing's Marco Piani on a panel discussion titled How is quantum working with machine learning to drive the future of financial services? It's scheduled for 3:00 pm and promises to be an engaging dive into the financial aspects of quantum computing.

Ahead of Gago's much-anticipated appearance, we caught up with him to delve into various subjects, such as his role at Moody's, how his firm uses quantum, and the broader political and security implications of quantum technologies.

A Quantum path

As the quantum industry expands, important leadership positions are filled by an exciting blend of people. Some candidates are deep subject matter experts with strict science backgrounds, while others bring a combination of business acumen and experience across the broader tech market.

Nascent industries can experience growing pains without the right guidance and business expertise. If quantum technologies are to succeed, it needs to draw people from science, academia, and more mature tech industries.

Sergio Gago falls into that category, with vast experience as a CTO in classical computing, machine learning, and artificial intelligence. His path into quantum computing involved a background in startups, corporations and teams of various sizes by way of Biocomputing.

"Years ago I sold my company and decided it was time to try something different," Gago says. "A new programming language would not cut it; I wanted something different. So I went into Biocomputing."

Biocomputing is another cutting-edge technological field. It aims to use cells, RNA, and DNA to perform traditional computational tasks. Cells already store and compute information efficiently. Unlocking their power could provide us with cooler, more energy-efficient computers.

However, during his investigations in Biocomputing, Gago stumbled upon the potential of quantum computing. A professor "mentioned something about solving one specific problem with annealers, and I went down the rabbit hole finding the whole world of quantum computing."

This experience inspired him to "get proper education and get back to physics and dedicate the next years of my career to quantum." As a result, Gago brings that rare blend of technical and business know-how to his role.

Moody's quantum ambitions

While Gago earned a postgraduate degree in Quantum Computing and Quantum Information at the Universitat Politècnica de Catalunya, he worked as the managing director of Media Solutions at Moody's. Soon, he became MD of Moody's new Quantum Computing division.

"I created the team at Moody's, and our strategy on how to leverage QC, as well as our cybersecurity quantum strategy," he says.

Moody's has pursued quantum computing in the last few years to model risk, capital flows, and portfolio management. While the firm had already developed proprietary classical computing models for these use cases, they have invested in quantum computing because it promises quicker, more accurate modelling.

Life at Moody's Analytics

Gago has been with Moody's since October 2020. While the firm is best known for its work as a rating agency, they also analyse the creditworthiness of assets, securities, and general financial entities.

Gago works in Moody's Analytics arm. Recently, this section finished as the overall winner in the Chartis RiskTech100 2023. "The part of the company I belong to is the leading company focused on providing models, data and applications for making decisions. Specifically, risk-related decisions."

Life at Moody's involves working with "virtually every financial institution out there." Gago notes. "Our services range from regulatory modelling for banks and insurance companies all the way to providing data feeds to corporates."

How quantum tech can change Moody's

When Moody's set up a quantum computing division last year — with Gago at its head — it caused a frisson of excitement within the broader financial industry. Moody's is already a mainstay within the financial services market, and their commitment to quantum is an essential step for the space.

"Moody's is a leading provider of solutions for many companies in the finance sector." Gago notes that their work spans "from economic capital calculations for banks, to liability and asset management for insurance companies."

Today, they provide their services through "computationally expensive" state-of-the-art mathematical models. However, in Gago's words, a focus on quantum can "bring new tools to go beyond what is possible today."

Quantum computing's financial use cases are promising. However, Gago believes it can go beyond "current use cases and evaluate and analyse risk in ways we can't even imagine today."

However, that's not the end of Moody's quantum abilities. They are also interested in cybersecurity and post-quantum cryptography. "Our clients look up to us to know what to do and with whom in an industry as changing and uncertain as quantum." Gago shares.

The quantum and classical computer union

While much talk in the quantum industry focuses on the day when quantum supremacy is achieved, the most likely business scenarios involve the marriage of both computational styles.

Hybrid computing — a feedback loop containing quantum and classic processors — should provide more flexibility. However, for Gago, the relationship between the two is even more fundamental.

"I don't see any way quantum can work without classical computing financial services." he notes, asking, "How would you encode your data otherwise?"

Indeed, encoding classic data within quantum is a challenging process. While there are many proposed approaches, many front runners are time-intensive, countering the benefits that quantum computing can unlock.

Gago believes quantum computing "empowers what we do classically today and supports some parts of that process." However, he sounds a note of caution, "Of course, we need to know and research more, but as of today, I can't imagine anything that is not hybrid."

Quantum computing adoption

Everyone has their own ideas about how quantum computing will change the business world. Implementing these technologies could result in rapid advances in various fields, such as materials science, medicine, and artificial intelligence.

We asked Gago what he felt was the most exciting element of quantum computing adoption. His answer was both thoughtful and intriguing. "For me personally, the most exciting part is how this could improve not only our current processes but also change businesses and how they operate."

On the current drive for quantum computing specialists, he says, "A lot of what we do, we do it because of our limitations, but once we eliminate some of those barriers, the sky's the limit."

While much of the conversations in the quantum space focus on technical aspects and improvements, what lies beyond the horizon is where the sector is truly interesting, according to Gago, who notes, "It's not just about finding quadratically or exponentially faster solutions, it's about how we can change the world afterwards."

Indeed, things like new drug discovery and enhanced AI have the potential to make our lives both healthier and more manageable. The sector could also solve environmental issues, saving the planet from existential doom. The possibilities are endless.

On the Agenda at Quantum.Tech Boston on April 25:

• "It's not just about finding quadratically or exponentially faster solutions, it's about how we can change the world afterwards." — The true potential of quantum computing lies less in the technical details than in the possible game-changing applications for improving the world.

• “I believe the industry needs to be more honest and direct on what is possible and what not, and what steps we have ahead of us.” — Tempering the hype around the quantum sector will help set more reasonable expectations among investors and the public.

• “Most countries have their own quantum programs not because they are cool, but because they realise the first country with a fully functioning, fault-tolerant QC will have a massive advantage over the rest of the world” — Quantum computing has become increasingly politicised with funding shifting from research and discovery to ensuring advantages for particular states and coalitions.

Download the Quantum.Tech agenda 

The politics of quantum technology

Gago is active in the quantum community and travels the world talking about how to harness the nascent technology's power. Funding for research and development often relies on government bodies. Preparing the world for quantum disruption involves working closely with state actors.

We asked him if he believed these relationships would make the industry overtly political. Gago replies that quantum technology "is already political". He notes that you can read articles calling quantum the "next space race" or the "next Manhattan Project" all over the news.

As Gago explains, much like businesses, "most countries have their own quantum programs not because they’re cool, but because they realise the first country with a fully functioning, fault-tolerant QC will have a massive advantage over the rest of the world."

However, he notes, "Luckily we see more and more collaboration between countries." These partnerships are vital for the industry on several levels.

In recent years, EU nations, alongside the US, Canada, Australia, and Japan, have forged quantum technology alliances among democratic nations. For example, meetings in Washington in 2022 focused on the risks involved in supply chain monopolies over quantum computer components.

Gago suggests these alliances are "crucial for the research and human elements of quantum" and for working out ethical implications of the tech.

Will financial services achieve quantum advantage first?

With several private companies and industries investing big in quantum tech, one of the most persistent and intriguing questions surrounds who will reach the quantum advantage first.

There are clear quantum use cases for the financial services sector and no shortage of teams investing in the space. Will this support and interest result in the industry making the breakthrough first?

Gago stops short of using the term quantum advantage when discussing the potential in the financial services sector. However, he says, "I think it will be one of the industries where we will see quantum benefits."

Gago deliberately avoids using quantum advantage or supremacy because he believes "You can use QC to improve how your company is doing certain processes and leapfrog on your development scale." But as he notes, that's "not the same as saying that a QC does some task better than any existing classical alternative."

While achieving the quantum advantage is essential, it's not the only practical application of quantum tech. Indeed, solving problems that classic computers can't is a very narrow type of success that might not have many immediate use cases. However, solving problems far more quickly than our existing machines do has several advantages we can quickly apply to our current processes and models.

Quantum security

Significant scientific and technological advances open up incredible possibilities. However, as history attests, they also carry the potential for abuse. Quantum computing could pose several security risks, including the tech's ability to crack encryption and breach current cybersecurity protections.

We asked Gago if he felt it was time that chief information security officers (CISOs) started to take the threat more seriously. "Certainly", he says. "We will soon be releasing an astounding and scary report on how many CISOs are not prepared or even thinking about being prepared."

However, as Gago points out, "being prepared does not mean changing all your encryption algorithms tomorrow or implementing quantum key distribution between all your offices." Instead, he believes that it means that firms should carefully audit their data and liabilities and ensure their systems aren't vulnerable.

Gago believes organisations should take an incremental approach that identifies and eliminates vulnerabilities like SHA-1 first before worrying about RSA / asymmetric encryption or other multi-factor authentication tools being cracked by quantum machines.

See our cyber security talks at Quantum.Tech this April in Boston

Does quantum have a hype problem?

Excitement about the possibilities of quantum computing can often spill over into frothy hype. Commitments from big names in tech and the emergence of several promising startups over the last few years have whipped the public and some commentators into a frenzy about potential use cases.

However, taking a step back from time and evaluating the landscape is essential. While applications exist, making the computers that make them possible requires quantum-error correction. We're not there yet, even if that watershed moment feels tantalisingly close.

Alongside the hype, there are pessimistic voices who suggest that problems that quantum computing must overcome are so significant that breakthroughs are unlikely for the foreseeable future.

So, what does Gago think of these detractors? "I think they are partially right," he says. "The amount of hype is very big, and we ourselves are feeding the beast. I believe the industry needs to be more honest and direct on what is possible and what not and what steps we have ahead of us."

However, despite this concession, Gago rejects the assertion that quantum computing is pure hype. "But that does not mean it is "only" hype. I truly believe in this industry and the capabilities of QC," he says before adding, "If we are honest with our claims, keep working on the difficult problems and work more together, we can show how the world can change.”

The five-year view of quantum

Most experts and commentators differ wildly on when commercial quantum applications will hit the market. Some people believe it will take 10 to 20 years to make significant inroads, while others believe the next few years will be monumental in quantum space.

So, where does Gago see the industry in the next five years? Interestingly, he believes that "some company will achieve 1M qubits and will have proven that you can do some incredibly good things with 1M".

However, he acknowledges that there will be two significant drawbacks. Firstly, Gago suggests "only a few select companies" will have access to these 1M qubit machines. Secondly, he says the industry will also discover that "you can't do everything" with 1M qubits and that more research will need to be done.

Finally, Gago posits that in the next five years, "many of the quantum companies existing today won't exist or will exist in a different way."

Quantum.Tech - April 25 in Boston

As mentioned earlier, Gago is participating in a panel discussion at Quantum.Tech event. When we asked him what he was looking forward to most from our Boston event, he suggested, "Meeting people. Hopefully, more companies on the demand side like us and some good research!"

You can catch more of Gago's insights at 3:00 pm on Day 1 of Quantum.Tech Boston in the Marriott Copley Place on April 25. He'll share the stage with Marco Paini, the VP of Financial Services at Rigetti Computing.

It promises to be an engaging talk for anyone in banking, financial services and beyond, with both speakers grappling with big subjects related to the role that quantum will play in the future of finance.

Get your ticket to hear from Sergio Gago in Boston this April here.