Ahead of Playground Global’s 2024 Annual General Meeting later this week, Atoms and Bits sat down with General Partner Peter Barrett to preview his remarks and hear more about what the next generation of technology will look like. These are unmatched times when it comes to technological progress, especially in the wake of the announcement that PsiQuantum would build the world’s first fault-tolerant quantum computer in Brisbane, Australia.
This interview has been edited for clarity.
A&B: You have a fantastic sense for the long arc of innovation. I’ve heard you chart a through line from, as you say, the fact that the earth was purple once upon a time all the way up to modern VC. Can you tell us about that history and how you see it?
Peter Barrett: The world has been made and remade by technical innovation many times over. Sometimes that innovation is natural; sometimes it is artificial. We have a sense that the world we’re living in is reasonably static, but in reality innovations like photosynthesis, electricity, computation, artificial intelligence, and the physics that attends making modern semiconductors — all of those technologies are transformative and have the potential to remake civilization. We are in the middle of an exponential acceleration in the kinds of technologies that are at our disposal if we choose to reshape the world.
A&B: What does that mean for venture capital?
Peter Barrett: There’s a certain imperative to deploy capital against the technologies that solve imminent problems — climate change, disease, agriculture. We’re right in the middle of a period of extraordinary innovation that is defining how we are going to live moving forward. We are right at the beginning of the most important changes in technology that allow us agency over the world, biology, and our civilization in ways that we’ve never had available to us. The challenge is to deploy capital in thoughtful ways to accelerate the change that is most important to us.
A&B: Walk us through those changes. What are those technologies?
Peter Barrett: Two-hundred years ago, we had a revolution in the way we produce energy and our understanding of electricity. Before that, we had breakthroughs in steam, steel, public health, manufacturing, and so on. But the changes that are happening now are happening at an unprecedented speed and scale — fueled by computation. Our civilization is vertically integrated on computation, which is built on silicon, which is built on EUV lithography, and computation is driving technical evolution at an unprecedented rate. That’s good, because we have some unprecedented challenges that need to be addressed by those technologies. Civilization progresses one tool at a time and soon we will have sharper tools than we’ve ever had before now that quantum computation is imminent. Quantum will transform the world in ways that people don’t fully appreciate. These kinds of technologies will define the way we live in the future with extraordinary advantages over the tools we have today.
A&B: What don’t we understand about quantum?
Peter Barrett: Once upon a time, we lived in a world without electricity. That phenomenon was unknown to us besides awe-inspiring lightning strikes and curious static sparks. Then we came to understand it, and it turned out to be fairly useful. We could suddenly create lightbulbs, motors, and generators and do electrochemistry and transform materials in new ways. A similar step-change will happen with quantum. We will create this world of quantum materials, which will open up hitherto unimagined ways of building things and deploying materials in our physical world that have enormous potential to improve the lives of everybody on the planet. We can’t really imagine phenomena like electricity or phenomena like quantum materials until we’ve experienced them. Today, we only have hints of what these things will look like.
A&B: The contrast between this world and the quantum-enabled world will be vast.
Peter Barrett: Yes. One way of understanding it is this: We can imagine a world without metal, right? We can imagine that in this world humanity could still build cathedrals and wooden houses and print books. But we wouldn’t understand the phenomena of electricity. We couldn’t build electric motors. We wouldn’t have the internet, AI, and everything else that electrons animate. But we wouldn’t miss them, because we simply wouldn’t understand the potential. We are living in a world analogous to one without metals when it comes to quantum materials. Quantum computers and quantum materials are tools of unprecedented power that will help us tackle our most challenging needs like energy transformation, address our worst diseases, and perhaps usher in an age of unprecedented abundance. Classical computers are terrible tools for simulating the quantum nature of nature. Quantum computers are different because they operate on the same quantum principles that nature does. That allows them to concisely and accurately simulate chemistry, materials, drugs, and so forth in a way that will allow us to move from a world of discovery to a world of design. We are right at the beginning of history, not the end. Deploying sensible capital and hastening the advent of those technologies is not only very profitable, but will have a profound impact on the way we live.
A&B: How do you think about deploying capital intelligently in these worlds that are coming that some of us — many of us — don’t fully understand quite yet?
Peter Barrett: As a rapacious venture capitalist I’m excited about the dynamics around deploying private capital against important things to create value. I get excited when there is an opportunity to turn capital into utility in a deterministic number of years. Sometimes they might be decadal efforts to build a quantum computer. Sometimes they can yield results within a year or two like flying a hydrogen plane. So you’ve got to be able to deploy capital against things that thermodynamics allow, that have demonstrable utility, and can show that rather than arguing about whether hydrogen planes are possible or not, build one and fly it. Then the capital will come to decarbonize aviation a decade ahead of schedule, for example.
A&B: But not all opportunities are made the same.
Peter Barrett: You always have choices as to what technology or opportunity you spend capital on. There are some things which are incredibly inefficient — things like direct air capture — or things that seem like something that would be good to have. But any dollar spent on direct air capture is wasted relative to an investment that prevented emissions in the first place. There are clever people investing in fusion technology and betting on lots of different architectures in parallel. This is probably a mistake. Fusion is really, really hard. We need to concentrate all of our efforts in one place, and not let 1,000 flowers bloom, because we know the physics of fusion demands scale. Fusion needs to be big. In certain cases, concentrating efforts in Manhattan Project-like enormous concentrations of talent and capital is the best way forward. In other cases, VCs should be helping ingenious founders test viable hypotheses at a smaller scale.
A&B: So fusion is an example of a science that isn’t ripe for VC.
Peter Barrett: Fusion is inevitable but not imminent, and we’re going to slow it down by spraying money in a thousand different directions. We have perfectly good fission technology, which is still the most scalable, safest way to make electricity on the planet. We’re afraid of it, but burning fossil fuels causes around one hundred Chernobyls a day in terms of public health impact. We’ve got to do a better job of understanding that nuclear fusion is inevitable, but fission is with us now and can make an immediate impact on emissions and the way we create electricity. We can drive these things with fission technologies, which are scalable, safe, and are available today. I don’t see the utility in Small Modular Reactors when we have really good Large Modular Reactors we can build at scale to decarbonize the grid. Willing something — wanting something to be true — and deploying capital against a desire is far less interesting than deploying that capital against an engineering challenge and a testable hypothesis to get something that can work.
A&B: How do you think about separating the signal from the noise? For instance, there was a lot of excitement around LK-99 earlier this year, but we’re on the threshold of an industrial-scale quantum device and few know it. How do you think about where opportunity is and where distraction lies?
Peter Barrett: There is real value in forming a hypothesis, designing a test, and measuring whether or not it works. Break an incredibly ambitious project like building a quantum computer down into testable steps that allow you to build confidence with later stage capital. Can feed-forward work? Can we make waveguides with sufficiently low loss? Better single photon detectors than have ever been fabricated? Ridiculous simplification and scalability of fault tolerance architecture? PsiQuantum posed these hypotheses and retired the technical risk step by step, and this process gave later stage capital confidence to invest. We now know these machines can be built at scale and we know many of the impossible questions that they can answer. That was not obvious seven or eight years ago. We had to form a series of well-tested hypotheses to move from one step to another, to build up the platform and architecture to know it works. Now that the quantum computer has moved to the construction phase, we are looking at materials and exotic technologies that will, say, replace silicon with other materials and provide entirely new ways of making semiconductors. But they must go through the scientific process first.
A&B: How does this scientific “guess and check” look in the start-up context?
Peter Barrett: All of these examples come down to this: can you form a question that can be answered for a bounded amount of time and money and allow those technologies to be measurable and testable? You can’t just put a billion dollars into something and wait 10 years and hope you get the right answer. You have to break it down into a series of testable hypotheses. For example, if the hydrogen plane flies, then hydrogen flight is possible. If you can contain hydrogen fuel and keep it at 20 Kelvin for a week, then the skepticism about liquid hydrogen is hard to sustain. Those sorts of questions go away. You’ve got to do the engineering; you’ve got to test the hypothesis. It’s not enough to say, “I want to make an AGI and a humanoid robot.” You have to go to the trouble of building a system that works — a system that has a path that is measurable and understandable and supported by physics and engineering and science. It can’t just be built on aspiration. No amount of enthusiasm will overcome the laws of thermodynamics. You have to do the science and the engineering to work up the ladder of capital to be able to build something that scales.
A&B: There’s an intellectual or scientific history to these things. They don’t simply appear out of the ether.
Peter Barrett: Correct.
A&B: You mentioned fusion may need a Manhattan Project-type initiative. What is the next industry where government needs to lean in?
Peter Barrett: There are incredibly positive signals in the U.S. around industrial policy that is focused on things like energy transformation and computation. I’m excited to see legislation like the IRA and the Chips and Science Act come into existence, because many of these transformative technologies require huge amounts of capital. Early stage venture can demonstrate the opportunity. But at some point, you are constructing fabs, designing networks of zero emissions fuel production, and transforming the way you mine and transform materials, which is all quite capital intensive. And so, the fact that there is now public policy and industrial policy that is reasonably sophisticated and is providing capital alternatives to growing out those technologies is incredibly gratifying. But there are pools of capital and pools of intellectual capability, which are underutilized at the moment. There are global opportunities to work with governments outside the U.S. in places like Australia and the U.K. to rework the way they think about deploying capital in these economies. To do so would unlock countless resources that we can deploy against next generation semiconductors, quantum, green metals, and opportunities that can dramatically accelerate the transformation of civilization and technologies. Playground Global has global in its name and we are increasingly thinking about how this ecosystem evolves on a global scale and how we plug into the intellectual capital, the natural resources, the renewables that exist all over the world. We believe they can be orchestrated in a coordinated way that’s unprecedented. We have technologies that are ready to go, we have solutions to big challenges, we have opportunities for huge amounts of value creation, bootstrapped by relatively modest amounts of capital from government entities, and I’m super excited about the deepening collaborations we have in the U.S., the U.K., and Australia.
A&B: How do you define deep tech?
Peter Barrett: The simplest definition of deep tech is something that almost certainly won’t work, but will be consequential if it does. A more nuanced answer is this: deep tech is about translating science and possibilities in the physical world — new phenomena and new capabilities that are discovered in science and engineering — into utility. We are surrounded by new results and new capabilities in nature and to believe that nature has no more mysteries and no more affordances to offer us is a mistake. For example, we still don’t know what nearly all of the universe is. We have yet to reconcile our two best scientific theories — general relativity and quantum mechanics are both incredibly successful but at a certain level entirely incompatible with each other. We are at the beginning of our understanding of the real nature of nature. Deep tech is about cracking open the physics of the universe and recognizing when a laser that is used to probe chemistry at its fundamental level turns out to be precisely the sort of laser one would use to build modern semiconductors. It’s these physical phenomena. It’s these new discoveries. It’s the science. It’s recognizing, “Well shit, If I can do that, then surely I could do this,” and then deploying capital against that insight to test a hypothesis and prove the opportunity.
A&B: What would you tell young founders about this opportunity? Obviously, there’s a lot of advantage to building in deep tech — natural moats and so on. But more interestingly, what would you tell them about where to find their passion?
Peter Barrett: Look at the boundaries of experimental results — what we don’t know — and realize that life is really, really short. The opportunity to translate these technologies into something important is something that you want to embrace early. Often, there is no point in spending decades of your career trying to do incremental improvements on something which isn’t going to change your life or anybody else’s life. There are extraordinary opportunities in materials and mechanisms and computation and AI and climate change. All of those things are incredibly rich and satisfying from an intellectual point of view and are incredibly lucrative from a returns point of view — both for your investors and family. Don’t waste your time with horseshit like Bitcoin. Don’t waste your time with things that civilization doesn’t need. We don’t have an infinite amount of time in life and we have deep and profound problems to solve, all of which are much more satisfying than putting lipstick on a chicken or playing around in the noise. Get in there and make your mark on civilization by building the tools that move civilization forward.
A&B: What tools do you have to prevent founders from getting lost in the noise?
Peter Barrett: We are now in a position where we can point to heroic, strange, and beautiful science that has been translated into big companies that do important things that have real commercial traction and scale. Now I can talk to a Ph.D. student who has a watershed technology, and say, “You’re thinking too small. Look at these other companies that have taken a different path. You’re every bit as smart and capable as they are. You can do this too.” We can help them understand the mechanism and the foibles that attend that, and put them in a position to translate their academic and scientific interest in things that really change the world. And that is unlocked by a cadre of world-changing companies. I can point to exemplars and help scientists and founders look up to Jeremy O’Brien, not Sam Bankman-Fried.
A&B: Thank you for your time, Peter.
.png)
