Welcome to Catch Me If You Can. I'm your host, Matt Pearl, Director of the Strategic Technologies Program at CSIS. In this podcast, we take a closer look at the technologies and policies driving tomorrow and how the United States can stay ahead in the global innovation race. I'm your host, Matt Pearl, and today we're taking a leap into the quantum realm. Quantum technology has long sounded like science fiction, but it's fast becoming a battleground for global influence. From unbreakable encryption and new sensing capabilities to computing power that could upend entire industries, breakthroughs promise to transform both economies and national security. China is investing billions to claim early dominance. The United States, meanwhile, is debating how to reauthorize and expand its national quantum initiative to stay ahead. To help us make sense of this competition, we're joined by Dr. Jim Lewis, Senior Advisor and former Vice President and Director of the Strategic Technologies Program at CSIS. Jim has spent decades at the forefront of cyber policy, export controls, and high-tech competition. He has done considerable work on quantum, leading the CSIS Commission on U.S. Quantum Leadership, and co-authoring its 2025 report. In addition to his work at CSIS, Jim has considerable diplomatic and intelligence experience. Today, he'll help us chart the quantum frontier, including geostrategic implications, PRC investments, and what the U.S. must do to lead. We're very excited to have him on the podcast. Jim, welcome. Thank you, Matt. So we're here to address how the U.S. can secure and sustain leadership in quantum technologies amid intensifying strategic competition with the People's Republic of China. Jim, when we're talking about quantum, that's the broad application of a quantum science to different areas of technology, usually split up into three areas, sensing, computing, and communications. So I think it might be helpful for us to take those each in turn. So perhaps we should start with sensing, which perhaps doesn't get enough attention. Could you talk about what that capability is and what the strategic significance of it is? Sensing leads the pack when it comes to quantum technologies. It's commercially deployed in a small scale, and there's more applications coming along. Basically, it exploits minute changes in the magnetic field, other quantum phenomena, to determine location, size, direction. It's great. It can be used for health purposes. It can be used for transportation, mineral exploitation, exploration. It apparently can detect deposits really well far down. But most importantly, quantum sensing has applications for both anti-submarine warfare, ASW, and stealth aircraft, stealth devices, because it will have the ability to defect stealth. It will have the ability to detect stealth aircraft at greater ranges. And most importantly, perhaps, we all know about electronic warfare and how GPS is now. So jamming GPS is just normal. Quantum sensing technologies provides for navigation capabilities that do not require GPS and get around the problem that electronic warfare will pose. Yeah, and that one on GPS is quite significant. I think for anybody who's hailed an Uber or a Lyft, they've experienced how even in clear sky conditions, GPS is accurate to about 16 to 20 feet maybe. That's why oftentimes it thinks you're across the street from where you are. With that sort of precision, that's consumer applications, but that is things like precise targeting, right, which have all kinds of military applications as well. By coincidence, I had coffee with someone from a quantum startup, and we were talking about this because his startup is working on a navigational device that will ultimately be the size of your hand, right? The first ones I've seen to have a C-17 to fly them around, they were huge. They were about the size of a Volkswagen. The current generation requires a Cessna. A Cessna is still a big step forward, but the next generation, which will be here soon, will be man-portable, easy to fit on a cruise missile. So I think it's the rapid improvement in the scaling and size of quantum navigation technologies that are going to make a huge military difference. Where is the PRC on Censang? What do we know about them? They're behind. And one of the things we're going to say in this podcast is two out of the three flavors of quantum, the PRC is behind. Actually, there's three and a half flavors, and we don't know where they are in one of them. But they have not done as well on sensing. It's a little more complicated. You know, look, they're good competitors. They could catch up. But right now, the U.S. leads in quantum sensing. And is there anything that the U.S. needs to do on sensing in particular? Or is it just a matter of maintaining that lead that you're talking about? Well, it's the same you get in all startups is that more money would always be appreciated. And I think DOD has started to realize the benefits of quantum sensing, started to realize the benefits of putting money into quantum sensing. So that's it. This is a technology where we have a strong presence and just need to invest more and figure out how to apply it to military and commercial problems. That's super, super helpful. Let's move on to the one that gets the most attention, computing. Could you talk about both what the capabilities are as well as what the strategic significance of quantum computing will be? Well, quantum computing, it's really unfortunate because there are no movies named Terminator taking over quantum computing. But it's just not that scary, which is too bad because it means most of the money has gone to AI. What quantum computing does, and it's not going to be a radical change. It's not going to be you go from zero to warp speed. What it will do is it will radically increase the speed of computing for solving certain problems, complex problems. But it's more like moving from a propeller plane to a jet engine when it comes to speed. And the future of quantum computing probably lies in hybridization with a quantum computing, the chips much further along than they were three or four years ago, QPUs, but still relatively fragile somewhat prone to error They need a lot of correction And that where supercomputing high computing comes in And there was recently an event where a lot of quantum a few quantum companies showed how you could pair a quantum computer with a high-performance computer and get truly amazing results. So I sound like Donald Trump when I say truly amazing, but all that threw me off track. When you pair HPC, GPUs, and quantum computing, you'll get an increase in performance. And the benefits are obvious for research, for logistics, for all the stuff that we're going to do with computing. We'll be able to solve problems that we have been unable to solve, and that's really encouraging for research, if nothing else. And what are the national security use cases that folks should be aware of? The one that gets the most attention, and rightly so, is encryption. it's everyone who follows this knows now that when quantum compute becomes widely available it will be able to defeat current encryption that the algorithms we use today will be insufficient to secure your traffic and that doesn't mean that the chinese and presumably us probably others are not already recording everything even though it's encrypted so they can decrypt later and i think that's the biggest challenge is, and that's actually my biggest fear. The ability to decrypt will have huge significance because it's used in banking, it's used in security, it's used in military, it's used all over. And usually the way it works in these games is when you get an advantage like that, you don't tell the other side. So what I worry about is the Chinese may, it's unlikely, but it's possible they may be able to pull ahead and we will know it. They'll be reading our traffic and we will know it. Now, to be fair, NIST a couple of years ago realized this was a problem, National Institutes of Standards and Technology, and created a contest, NIST is good at contests, for quantum proof encryption. And I think there were three winners, three algorithms that if you deploy them, will allow you to continue to encrypt your traffic. There's a transition process. The last time we did this, which was DES to AES for you crypto fans. When quantum computing becomes viable at an industrial scale, it will allow people to break current encryption to read traffic that we think is safe. And that's a surprise nobody wants to have. And NIST, the National Institutes of Standards and Technology, realized this a few years ago, started a contest. NIST is good at a contest for programmers, for coders to come in and offer quantum proof algorithms. I think three algorithms have won. So we now have quantum encryption products that will allow you to evade the problem of being decrypted. The dilemma is that the last time we did this, which was the transition from digital encryption standards, DES, to advanced encryption standards, AES, it took three or four years. So even if we start now, we wouldn't be done until the end of the decade. And that will be one of the dilemmas is while you are in that transition period, you're vulnerable. Obviously, there's a government side of it, and that's going to depend on the ability of the Trump administration to execute on implementing this, right, particularly in the military and the intelligence community. There's also the commercial side of it that you've talked about, like from past transitions, what do we need to do in order to ensure that industry adopts this? The key to transition is the Treasury Department because the Treasury Department regulates the banks. And so the bank regulators, and Treasury has a number of bank regulators, the bank regulators will just tell the banks, thou shalt do this. It's in the bank's interest, but having that regulatory burden where you will be unable to transact business until you make the transition will force the big banks, the big financial companies. In fact, it'll force all banks to make the transition. And when they do it, they're going to make their customers come along for the ride. So I think the key to watch here is when does Treasury pull the plug? They're already talking about it, so we know it's coming, that you have to have a transition by some date certain. I think the date certain is 2027, maybe 2028. But that's the thing to watch is once you tell people, sorry, can't use your credit card anymore, that will get their attention. And you make a really good point about how we won't know when the PRC has broken our encryption. Isn't another a risk to this that they're hoovering up data at this point that later they can decrypt once they have the capability, even if they don't today? There's nothing we can do about that. The Chinese collect massive amounts of data. I've even asked some of my Chinese friends, why do you want all this stuff? You must be really paranoid. And the answer is they want it all. They've been collecting data, at least for the last decade, on healthcare companies, banks, travel agents, airlines, OPM, of course. So the Chinese have massive amounts of data on Americans and everyone else that they're storing and that they hope they'll be able to. And remember, this is not just processing. It's the ability to manage vast quantities of data. It's the ability to search and group that data. So we're kind of hosed. Now, the good news is, if you look, you'll see satellite pictures of someplace in the middle of Utah. It looks like a very large square building where NSA does exactly the same thing. So everybody who can afford it is collecting and storing data for that moment when quantum computing arrives. Yeah, but isn't the best hope, perhaps, that we get wide adoption of these quantum-resistant algorithms, and then a few years goes by, right? Doesn't the information become much less useful as it becomes cold? It depends. The perishability of information depends. Most of the transactional stuff will decline in value significantly. But there are some things, the secret plan that the Russians are always looking for, the secret plan probably won't change that much. So there's some percentage of data that will remain valuable even two or three years after it's created. Most stuff is worthless, right? I mean, it's like your transactional data is not going to be that useful. But planning IP strategies those will remain valuable And just a footstop on one point that you made the Chinese have always stolen a lot of data right Going back to the OPM hack, which that was more than a decade ago, right? They've loved stealing data. I'm not so sure they've always known what to do with it, right? They just wanted to collect it. But then you have this combination of AI plus quantum. Actually, it could be something that they're able to really understand everything they've stolen. When I was a kid, when you drove by NSA, when you entered where the entry gate is now, there were boxcars on a railroad siding parked outside NSA. Those were filled with computer tapes of stuff we had recorded and waiting for the magic moment when we could read it. So it's just something everybody does. The technologies we have now make it much easier. You don't need a boxcar, for example. Make it much easier to store and collect. And so eventually, yeah, the stuff that was secret last year won't be secret anymore. To put a little context on, we were doing this in the 1950s before we could break Soviet code. And so it's just part of the game here for SIGINT and the Chinese are particularly good at it. So let's move on to quantum communications. Could you tell us about that capability as well as what the strategic significance of it is? Well, if it worked, quantum communications would be great because it would be impossible to even look at a message without leaving a trace. So there'd be no more hacking, at least the way we understand it. So you can't touch the message, interfere with the message, modify the message without leaving a trace in quantum communication. The problem is it doesn't work. An American company chose Brooklyn. I don't know why they chose Brooklyn, but they chose Brooklyn and tried to wire Brooklyn for quantum communications. it's fragile it tends to break a lot the chinese led in this area and they may still lead they had something called mischievous which was a satellite and they have been able to do quantum communications over long distance which is one of the benefits quantum communications that you cannot tamper with over long distance but it's very fragile like a lot of quantum technology so far and they haven't been able to keep it up. So, you know, one thing you always worry about when you don't hear any news, the Chinese are really good at putting out press releases. They haven't done any press releases on Missius or quantum communications for a while. I think that's because they run into a brick wall. So on quantum computing, where is the U.S. and allies and partners versus the PRC? Well, this is a race that has a lot of horses in it, which is different from some races, in part because it's more science. It's very much, I used to have a bumper sticker that said the side with the most physicists wins. And quantum is in that category. So the Europeans have put a lot of money into quantum. They are competitive in this race as opposed to others. The Chinese, of course, but some individual nations do quite well. The Canadians, as long as they resist being the 51st state, will be among the leaders in quantum. The Australians have put a huge effort into building a quantum workforce. The Germans have invested. So the Japanese have programs that are pretty good. So unlike AI or some of the other semiconductors, this is really a multi-horse race. There's five or six countries. Now, the good news is we tend to be allies with all but one, and it's a very cooperative relationship. One of the problems for us in the past is that Chinese students would come here or to Europe to study quantum physics. The head of the Mishius program in China is a graduate of a Viennese university that also graduated his classmate, the head of quantum computing at Google. So the interconnections that we've suffered from continue to exist. But in this race, the Chinese have some abilities. They have a lot of money. They have a lot of smart people, and they're committed to winning, at least in one part. So far, that hasn't happened, But it could be the Australians. It could be the Europeans. It could be the Canadians. Most of this has turned out to be a commercial market where you have companies in these places and research institutes in these places that all work together. And it's increasingly difficult for the Chinese to work with others. And that gives us an advantage. So you talked earlier about how, you know, in quantum computing, one of the most important capabilities, how there are a lot of horses in the race, a lot of companies. And it really depends on the ability of U.S. and allies and partners to work together and leverage their different innovations in order to out-compete and out-innovate the PRC. So, I think that brings us to the CSIS Commission on Quantum, because that was one of the recommendations that the commission reached. It was headed up by Admiral Mike Rogers, former head of the NSA. Could you talk about, beyond working with allies and partners, what the other major recommendations were of that commission? You know, a lot of it is to pay for the things that the market won't pay for. We don't know. There's different kinds of quantum computing technologies, probably at least three distinct variants. We don't know which one's going to work. So you have to sort of fund them both. There are some supply chain issues because quantum is more than just the cute little computer or the chip. You have to have materials. You have to have cooling. One of our biggest recommendations was workforce. And Australia is a good example here. We interviewed for the commission Kathy Foley, who was Australia's chief scientist. Kathy had the sense to identify quantum as a growth area more than a decade ago. And so the Australians have been putting money into training quantum scientists. And now I'm one of the biggest populations of quantum scientists in the world, which is pretty astounding for a country that size. So workforce, supply chain, investing in startups, in the innovation base, those are the recommendations. So that's really helpful and it does bring us to the National Quantum Reauthorization Act, which is currently pending in Congress. I think we probably have a window of until about April, May to pass it before the midterm election dynamics start to come into play. So could you talk about what's in that act from your perspective? Any changes that you'd like to see? So a friend of mine who was on the transition team told me the Trump administration loves quantum. And I think that true You look there a couple members of the commission some people from CSIS board who are now in positions of influence in the Trump administration I think the main thing is to get the funding back on course, to get DARPA and NSF to be able to hand out, because this is still, it's not a science project, but it's still very research heavy. And so getting DARPA, NSF, and some other agencies involved in funding research would be the best thing we could get out the bill. And I think that's the part I'd like to emphasize. Yeah. And the bill currently as proposed, although obviously there are negotiations ongoing, but it proposes $2.7 billion over five years, which is not a lot of money in the scope of the federal government, but really critical, right? This is an industry that's still very small, right? So in the industry, that's actually quite a bit of money. It's not as much as the Europeans are spending. It's not as much as the Chinese are spending. Our benefit, and this is one thing the commission emphasized, is we have a private sector. There's about 400, roughly 400 quantum companies in the world. Most are small. Most are startups. 150 of them are American. So anything we can do to accelerate that startup base, to accelerate those innovators can help. And that's where the money, although I wish it was more, it's enough to help do that. That's really helpful because this is, you know, obviously there are differences of opinion on government spending that can fall along partisan lines. But this is really an effort to stimulate the private sector and to get some of those early stage companies what they need in order to be able to innovate, right, and compete in the market. We have a different innovation model than Europe or China, and it's actually one that works better. Usual measure for that for me is income. It's unicorns. It's number of startups. It's not number of patents. But when you look at how the U.S. is doing, our model works better. It is largely market-driven, private sector-driven. But, and this is where the bill becomes important, it's essential that there's government funding to support R&D, basic science, basic research. You need that as part of the model we've had. And it's a model that's been successful since the Eisenhower administration. I hope we can keep it going. So, Jim, this has been a really helpful conversation. Let's see if I can reflect back to you some of what we discussed, and then you can let me know if that captures our conversation and what else listeners should know. So we talked about the three different flavors of quantum and where they are. We talked about quantum sensing, how the U.S. really leads the pack. There are a lot of applications, very useful consumer applications and things like health care, but that there are enormous national security implications to this, that it will affect anti-submarine warfare, stealth aircraft. It will serve as a backup and a more accurate version of GPS for things like navigation and how the PRC is behind. But nonetheless, there is a need for funding and the ability for the U.S. to stay ahead and hopefully be commercialized in the next few years in the U.S. and allies and partners. Second, we talked about quantum computing. This isn't quite the radical change that sometimes people talk about. It's a real increase in the speed of computing for certain types of complex problems. and that it's really when you combine the developments in quantum computing with GPUs that you can solve some problems that you can't today. Most notably that you can break encryption, which has huge national security implications, particularly as the Chinese, if they do it first, they're not going to tell us. And in the meantime, even if it takes them a few more years, they're going to be hoovering up massive amounts of data. Some of that data will be perishable, as you say, less useful, But some of it will be enormously valuable, and specifically national security secrets are oftentimes enormously valuable for a long time. And it's when you combine AI plus quantum that you could really have the PRC making sense of that data once they're able to break it. And so, you know, we talked about the importance of what NIST is doing, having quantum proof encryption, having a transition process, having cooperation in the administration amongst the departments and agencies so that the Treasury Department, for instance, makes sure that the large banks transition to quantum resistant encryption. We talked about how in quantum computing, there are a number of countries that are competitive, that it's US, PRC, Europe, Japan, Australia, and so on. And it really is a globally competitive market that's very different from AI. Finally, we talked about quantum communications. We talked about how if it works, it would be an extremely secure form of communications, that it would essentially prevent hacking. But the problem is it doesn't work, that U.S. and PRC have both run into barriers based on your reading of the situation. So then we talked about the CSIS Quantum Commission. Some of the recommendations there are the importance of things like workforce funding, having the right model in terms of working with allies and partners so that, as we are talking about in quantum computing, we can really ensure that the U.S. is able to leverage innovations both here as well as in Europe and elsewhere. We talked about the National Quantum Reauthorization Act, how this is a really critical piece of legislation, how we have several months here in order to pass it. Most importantly, provide funding, $2.7 billion currently, that would really accelerate the startup base, really spur that innovation model that would ultimately be taken up by the private sector. It would allow us to stay competitive in these three areas that we just talked about, sensing, communications, and computing. So does that capture our conversation? And what did I miss? You didn't miss anything. The only thing I'd add is that the head of Google's quantum program, who was the classmate with the head of the Chinese ambitious program, I said to him, how are we doing on quantum? Are we ahead? Are the Chinese ahead? Who's leading? And he said, we're ahead, but I look over my shoulder every night. So quantum is going to be a race. We're doing OK. And I think you captured it really well. Well, Jim, thanks so much for joining us. As always, you did an excellent job of breaking down a really complex and consequential topic. So really appreciate your time. Thanks for listening and be sure to join us in two weeks. That's it. for this episode of Cash Me If You Can. Don't forget to subscribe and follow CSIS for more deep dives into the technology shaping our future.
