CIA Backs Google Spinoff Sandbox AQ

Sandbox AQ, the software-as-a-service (SaaS) company that spun out of Alphabet (Nasdaq: GOOGL) in March, has added the U.S. Central Intelligence Agency (CIA) to its growing investor list as it aims to get a head start on applications using quantum computing.

The startup, founded in 2016 and based in Palo Alto, Calif., with roughly 55 employees, has reportedly added to its Series A funding with contribution from In-Q-Tel, the CIA’s venture fund, and Paladin Capital Group. Previously announced investors include Eric Schmidt (the ex-Google CEO who is also chairman of the Sandbox AQ board), Marc and Lynne Benioff’s TIME Ventures, Breyer Capital, Thomas Tull, T-Rowe Price Associates funds and accounts, Guggenheim Investments, Section 32, and Parkway Venture Capital, among others.

While not disclosing the amount of the funding, CEO Jack D. Hidary says it is “well into the nine figures.”

A Focus on Quantum Security

Sandbox AQ has been working on what it calls the intersection of artificial intelligence (AI) and quantum computing (hence the “AG”), with a particular focus on generating code that is impervious to being hacked by quantum computers.

So why should anyone care about this topic, given that quantum computing remains in its infancy, and technologies such as confidential computing are increasingly available? Though still a decade from widespread commercial deployment, experts say that once quantum technology takes hold, it will quickly pry open any data source protected by encryption. Government, telecom, healthcare, financial services, and other industries could become instantly vulnerable to information compromise and attack.

“The majority of the world’s data … is currently protected using RSA, ECC and other similar cryptosystems that were developed decades ago,” stated CEO Hidary on the company’s website. “That data is often transmitted over public internet infrastructure, leaving it vulnerable to hackers. The day is approaching when quantum computers will be able to crack RSA/ECC encryption.”

Preparing for Quantum Encryption Attacks

Though Sandbox AQ is working on a range of quantum-based applications, its presently offers an encryption search service for use on classically designed computers. The goal is to crawl through a company’s infrastructure to find all encypted data. This will ensure that companies don’t fall victim to having their data snatched in “store now, decrypt later” exploits that anticipate the day when post-quantum cryptography (PQC) becomes available.

“[P]reviously stolen and stored data now exists like a ticking time bomb, just waiting for the quantum hardware that will set it off,” states Hidary. “While it’s too late to prevent those breaches, we can use quantum and AI solutions right now to protect against further damage being done.”

Several Customers

At least one organization is planning ahead. Mount Sinai Health System, headquartered in New York, is working with Sandbox AG to discover its encrypted infrastructure to determine how to protect it against future quantum attacks. Other customers reportedly include Vodafone, and SoftBank, which has said that it plans to use Sandbox AQ algorithms in its 4G, 5G, and WiFi services.

The In-Q-Tel backing signals Sandbox AQ’s interest in government data protection. This is in line with a White House memo in January that orders agencies to plan for “quantum resistant algorithms.” A particular concern apparently has been the role Chinese hackers could play in deciphering U.S. data.

Sandbox AQ isn’t alone in its efforts to forestall quantum decryption. Other startups include QuSecure, Quantum Xchange, and Oxford University’s PQShield Ltd. IBM (NYSE: IBM) also has been actively pursuing what it calls quantum-safe cryptography.

It may be early days, but the threat of quantum computing break-ins has clearly prompted widespread concern and, judging by Sandbox AQ’s recent news, is drawing substantial investment.