Arqit announces
Technology Update - moves away
from satellite strategy
14 December 2022
Arqit Quantum Inc. announces a
significant change in its technology strategy,
resulting from innovation which is expected to have
a positive impact on the company's future financial
position and results.
Arqit’s technology involves the
supply of a lightweight software agent to end point
customer devices or cloud machines for the purpose
of making encryption keys which are zero trust and
computationally secure. As announced by Arqit in May
2022, the proof of this capability was independently
assured by the University of Surrey, a GCHQ
Accredited Centre of Excellence for Cyber Security,
and PA Consulting.
As part of the background
technology which allows Arqit’s software agent to
operate, identical sets of random numbers
("replicated entropy") must be delivered securely
and frequently to data centres. Arqit invented a
quantum satellite protocol to facilitate delivery of
replicated entropy, which it believes is unique in
achieving delivery with quantum safety. Pending the
launch of its satellites, Arqit has been using a
terrestrial method of delivering replicated entropy
using a set of classical digital hardware and
software elements (i.e., not quantum
communications), and following further innovation
this year, has recently deployed an advanced version
of terrestrial delivery. The security of end point
encryption keys is as strong with the terrestrial
method as it is with the satellite method. Arqit has
therefore concluded that it no longer needs to
incorporate satellites or the associated ground
infrastructure into its core QuantumCloudTM offering
in order to deliver a quantum safe product.
There is continued demand for
quantum satellite delivery of replicated entropy
from customers with ultra-secure use requirements,
such as government defence departments. To these
customers the satellite method offers advantages in
sovereign, on-premises control of key agreement and
in eavesdropper detection (whereby one knows if an
attacker is attempting to eavesdrop even though it
cannot successfully steal information). Arqit
believes that other attempts to generate security
through quantum satellite transmission are flawed,
and in its invention of a new set of protocols, it
solved those problems. Because the security of
Arqit’s quantum satellite technology cannot be
deduced from individual patent filings, all the
patents, code, protocols and proprietary IP have
been independently validated by an eminent professor
in this domain with a leading UK university and the
conclusions shared under NDA with potential buyers.
Arqit intends to sell (in whole
or in part as a capacity sharing arrangement) its
quantum satellite currently under construction to a
customer with such ultra-secure requirements.
Following the sale of its satellite currently under
construction, Arqit will build no further satellite
infrastructure and intends to licence its quantum
satellite IP to subsequent customers with similar
requirements, which will enable those customers to
build their own systems. Arqit is currently in
discussions with a number of potential customers
regarding both the purchase of its existing
satellite and the licence of its quantum satellite
IP. Arqit expects the licencing of its quantum
satellite IP to generate additional revenues without
additional capital expenditure.
Arqit expects that these
changes to its technology strategy will result in a
positive effect on its future results, with a
portion of capitalised satellite costs recouped
through the planned sale of the satellite currently
under construction, additional revenues through the
licencing of its quantum satellite IP and the
elimination of future capital and operating
expenditures associated with use of satellites as
part of its core product offering. Arqit intends to
continue to perform under its satellite construction
contract with the European Space Agency and
recognise the related project revenues generated
thereunder.
Arqit’s scientists and
engineers, uniquely in the world have emulated the
relevant effects of quantum communications
properties in classical software form. This produces
a mass market encryption platform as a service which
enables its customers’ systems to become quantum
safe and to achieve benefits in flexibility, energy
efficiency and simplicity.
Thus, as a result of further
ground breaking innovation, Arqit believes that its
core QuantumCloudTM product is greatly simplified
relative to the version of the network architecture
that included satellites. Based entirely on
classical digital hardware and software,
QuantumCloudTM will now be more scalable, more
efficient, and less risky to operate. As
demonstrated by recent announcements, major
corporate and cloud customers are choosing to use
this product.
David Williams, Founder,
Chairman and CEO said: “Through innovation we have
simplified our technology and removed significant
future capital expenditures. The resulting software
is now easier to support and consume by customers
and is suitable for a high growth, annual recurring
revenue style business. The White House has urged
all Federal Organisations to upgrade to post quantum
cryptography and the NSA has declared that symmetric
key encryption is the best way to do that. We
believe that Arqit is the only company in the world
that can deliver this in a zero trust and scaled
way. Now, through channel partners like AWS, Dell
and Fortinet, the world can buy the stronger,
simpler encryption it urgently needs.”
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