Hedge Funds Start Experimenting With Quantum Investing

Published by whurley (11/07/2017)

Renaissance Technologies, DE Shaw, and Two Sigma Are All Testing Quantum Investing

This is where things get interesting. I’ve told you that I think quantum computing will change everything sooner than you expect. I’ve asked why more VCs don’t invest in quantum computing. Next week, I’ll be speaking in New York about how quantum computing will change financial services, and not for the first time. This message mostly provokes skepticism.  Let’s just say I don’t have a lot of converts under my belt yet.

Imagine my lack of surprise when I learned that Renaissance Technologies, DE Shaw, and Two Sigma—all well-known hedge funds—are now experimenting with quantum computing to give themselves an edge in trading. The Financial Times article quotes Alex Wang (Managing Director, DE Shaw):

“We’re interested in any technology that has the potential to leapfrog existing approaches, particularly if it can surpass both the speed and reliability of traditional computing.”

As They Should Be

Too right. Quantum computing will be a massive change in the way we process data.  Few areas will be impacted like finance.

It’s not just the hedge funds that are getting their feet wet. One of the most interesting groups mixing quantum computing and financial services is “Quantum for Quants.” They have been operational for some time now, and their website is a great resource for anyone in financial services.  Plus, they have some awesome blog posts like “Finding Optimal Arbitrage Opportunities Using a Quantum Annealer,” and “Optimal Feature Selection for Credit Scoring and Classification.” I don’t have to tell you why we’re seeing the start of a trend towards quantum computing in the financial world.

(It’s all that money.)

Quants see the power in quantum computing. Hedge funds are starting to make strides toward quantum computers for trading.  This should be a wake-up call to other industries. We will advance further in the next 10 years then we have in the last 100.  In this game, ignoring quantum computing or waiting for it to become “real” will be the same as losing.