Quantum, space, fusion: three firms engineering the future

As with all investments, your capital is at risk

Every company wants to make an impact. But few can say without hyperbole that they could change the trajectory of human progress.

PsiQuantum, SpaceX and SHINE Technologies qualify. They are attempting, respectively, to build the world’s first useful quantum computers, make humanity an interplanetary species and harness nuclear fusion.

That’s not all they share. Each is a private company, meaning they get to pick who they sell their equity to. Each is founder-led and young, emerging after the millennium. And each has underpinned its grand mission with a viable commercial strategy.

“It’s all well and good to have a product that sounds really cool, but unless it’s affordable or easy to distribute, it’s not going to have the impact that people hope or be able to create the value that it should,” investment manager Luke Ward tells our Short Briefings on Long Term Thinking podcast.

“That’s what creates a long-term, durable edge around these businesses.”

Ward led Baillie Gifford’s investment into the companies, and Edinburgh Worldwide Investment Trust (EWIT)’s portfolio, which he co-manages, contains all three.

PsiQuantum’s photonic computers

The intricacies of quantum computing are notoriously hard to explain. But in simple terms, the machines tackle tasks that would be impractical or impossible to solve on ‘classical computers’ by harnessing the properties of matter and energy at their most fundamental level.

“There’s a class of problems where the complexity of simulation increases exponentially, so even as you throw more and more computing power at it, even the world’s largest supercomputers struggle,” Ward explains.

“And that’s because the nature of those problems is quantum mechanical. So we need a quantum computer to simulate them properly.”

Tap the icons in the graphic below to explore quantum computing’s potential uses:

While other firms have approached the challenge by trying to develop “exotic hardware”, PsiQuantum has focused on adapting existing semiconductor technology. This has the advantage of letting it draw on existing supply chains, and the firm intends to build two commercial-scale quantum computers by 2030. One in Brisbane, with financial support from the Australian government, and the other in Chicago, with funding from the US Department of Defense.

“These computers will likely be plugged into the cloud,” says Ward. “The question for us is what the business case will look like. PsiQuantum could say: there’s a biotech company that wants to produce a cure for a particular ailment, let’s partner with them rather than being a supplier and share in the overall value that creates.”

SpaceX’s satellite revolution

SpaceX is already generating billions of dollars, connecting customers to its Starlink internet service and delivering crew and cargo into orbit for governments and third parties.

By landing and reusing the rocket booster of its Falcon 9 spacecraft, the firm has radically cut the cost of sending payloads into space. And by demonstrating it can catch the booster of its larger Starship vehicle from midair, it has paved the way to a fully reusable system that would let clients deploy bigger objects at lower cost.

“Thanks to SpaceX, it’s increasingly affordable for everyday businesses to operate hardware in space,” Ward says. “This is a company that can get better as it gets bigger.”

Starlink uses SpaceX’s own satellites to provide a broadband-quality service to homes, businesses, ships and planes. But usage could balloon thanks to the advent of smartphones connecting directly to the network. Select Samsung Galaxy and Apple iPhone owners are testing the service in the US.

“You need a high-power signal to reach a telephone,” Ward explains. “Previously, it was too expensive to install a satellite with that power. Now, it’s possible because of the rocket innovation and learnings from running the satellite network.”

For SpaceX, these achievements are stepping stones to establishing colonies on Mars. And while that’s, at best, decades off, the goal still figures into Ward’s investment case.

“The stretching goal gives them a competitive advantage beyond a salary in hiring the best people in the world,” he says, explaining it’s also an incentive “to make space a hundred or a thousand times cheaper from where it is today. That’s phenomenally powerful as a value generator to unlock more and more applications.”

SHINE’s path to fusion power

SHINE Technologies’ multi-stage approach to nuclear fusion echoes that of SpaceX. It aims to replicate how the sun creates light and heat by combining atoms, unlike today’s nuclear power stations, which split them apart. This would provide an abundant, clean and safe energy source – without the expensive waste handling and disposal issues of legacy nuclear power.

“The problem is that taking the sun, miniaturising it and keeping it in a ‘little bottle’ in a power plant is enormously complex,” Ward says. “We find SHINE appealing because it’s not trying to leap straight to energy generation.”

The company's first step was to create neutrons – subatomic particles with a neutral electric charge – to test industrial components.

“Lightweight materials like carbon composites are hard to image with X-rays,” Ward says, adding that aerospace and defence companies now seek out SHINE’s service to detect potential flaws in plane wings, turbines and other mission-critical parts.

The company has reinvested the resulting revenue into running its fusion technology at a higher power level. Recently it has begun to produce medical isotopes: radioactive particles that can be used to diagnose and treat diseases.

“These pharmaceutical products sell for about $1bn a gram,” Ward says. “Lutetium, for example, in recent clinical trials has been found to cure some cases of prostate cancer.”

As its next challenge, the firm plans to generate fusion reactions powerful enough to recycle nuclear waste.

“The US government has about a $45bn nuclear waste liability,” Ward says. “You could make rare earth minerals out of it and not have to worry about storing the waste for millennia. So even before we start thinking about energy, SHINE could create enormous value with fusion.”

His broader point is that even if, within the next decade, quantum computers don’t become commonplace, humans don’t establish a base on Mars and nuclear fusion doesn’t become the dominant energy source, all three companies could still deliver exceptional long-term growth for our clients. But if any – or perhaps all – fulfil their true potential, the benefits to society would be colossal.

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