Alphabet spin-off Sandbox AQ raises ‘nine figures’ funding

Sandbox AQ, a software startup developing quantum-computing and artificial-intelligence tools for commercial use, on Tuesday officially spun off from Alphabet Inc.’s Google to become a stand-alone company.

The move was fueled by a “nine-figure” funding round that included Breyer Capital, T. Rowe Price Associates Inc. and Guggenheim Partners LLC, among other investors, the company said. The amount and terms of the deal were not disclosed.

Eric Schmidt, Google’s former chief executive, was named chairman of the new company, and a number of other high-profile investors will serve as advisers, Sandbox said.

Sandbox, which was created six years ago as an independent division of Google, today has some 55 engineers, scientists and technologists covering areas such as physics, chemistry, AI, neuroscience, cryptography, mathematics and other disciplines, the company said. It plans to use the new capital to hire additional AI experts, physicists and engineers.

“The primary driver for the company needing independence was to attract outside capital to grow faster,” Jack Hidary, Sandbox’s chief executive, said about its break from Google. “Alphabet was a very positive environment for the Sandbox team,” he said, “always making sure we ask the question how novel tech can positively impact big problems.”

Alphabet did not respond to requests for comment.

While full commercial-grade quantum computing is still years away, industry analysts say, Sandbox’s goal is to develop quantum-enabled software tools for use by companies in sectors such as telecommunications, financial services, healthcare and government.

Quantum computers hold the potential for solving equations and running algorithms—with vast numbers of variables and possible outcomes—many millions of times faster than conventional computers. Rather than store and analyze data as either zeros or ones, quantum computers operate with quantum bits. Known as qubits, they are a complex dual system of both zero and one simultaneously, a concept derived from quantum physics.

Palo Alto, Calif.-based Sandbox says combining quantum computing with machine-learning models would help accelerate advances in drug development, clean energy and data security, among other benefits. It currently offers a cloud-based cybersecurity tool designed to head off the potential use of quantum capabilities to unlock encrypted data.

Mount Sinai Health System is in talks with Sandbox to develop quantum-powered clinical-decision support tools, which require a complex integration of electronic health records, home-health apps and wearable devices, and imaging data, according to Dr. David Reich, the hospital network’s president. He expects to roll out these and other applications within the next five to 10 years. Mount Sinai in 2020 began working with advanced AI software in efforts to diagnose and treat Covid-19.

Jim Breyer, founder & CEO of Breyer Capital, said in a statement that quantum technology will have an outsize impact on communications, healthcare, finance and other sectors. “While many quantum companies are focusing on computing hardware development, Sandbox AQ is solving real-world challenges and delivering applications to customers right now,” Mr. Breyer said.

Google and other large tech firms, including International Business Machines Corp. and Honeywell International Inc. are also working on commercializing quantum technology.

Google CEO Sundar Pichai announced the creation of a Google Quantum AI campus in Santa Barbara County at the company’s annual developer conference last May. He called quantum computing a “fundamental shift” in technology. The Wall Street Journal