• In today’s CEO Daily: Sharon Goldman talks about quantum computing with D-Wave CEO Alan Baratz.
• The big story: Trump imposes 25% tariffs on auto products starting April 2.
• The markets: Fear up, stocks down.
• Analyst notes from Panmure Liberum on Germany’s stimulus package, JPMorgan on AI in China, Convera on the declining U.S. dollar, Goldman Sachs on inflation.
• Plus: All the news and watercooler chat from Fortune.
Good morning. Quantum computing has long been touted as having the potential to solve problems in minutes that would take today’s best supercomputers thousands or even millions of years to crack. While that may sound like a dream to many CEOs, as the quantum industry has grown over the past decade, so too has the debate over its ability. Does the tech offer a chance to provide companies with real-world breakthroughs or are claims of “quantum supremacy,” and its vast superiority to traditional computing, just hype?
In January, at the Consumer Electronics Show in Las Vegas, Nvidia CEO Jensen Huang said “very useful” quantum computers are likely 15 to 30 years away—leading to a stock tumble in the space. “I was quite disappointed in him,” said Alan Baratz, CEO of quantum company D-Wave. “He just kind of lumped all quantum together.”
In a sign that Huang wanted to make amends with the industry, Nvidia’s March GTC conference featured the first “Quantum Day”—and D-Wave’s Baratz participated in one of the panels. But while Huang may have wanted to soothe rattled investors, quantum stocks still fell after the event—including D-Wave.
I had the chance to sit down with Baratz as the company (which was founded in 1999 and went public via a SPAC merger in 2022), made its own quantum supremacy claim. It published a new paper in the journal Science in mid-March, which showed it had completed a virtual experiment on a quantum computer to see how a material’s atoms and molecules would behave in the real world. It said a traditional computer could not have completed the simulation.
I came away from our conversation surprised by the nuances of the quantum computing debate. Here are three takeaways for business leaders:
One form of quantum has already been commercialized. D-Wave focuses on a kind of quantum computing called “annealing” that works well for optimization problems like determining vehicle routes and employee scheduling. Clients include Japan’s NTT Docomo and Canada’s Pattison Food Group.
Quantum and AI will work together for companies. Baratz says quantum and AI often solve different parts of the same problem. For example, generative AI might predict future product demand, while quantum could optimize the supply chain to meet that demand. A quantum computer could also potentially train AI models more quickly.
We won’t see the full promise of quantum for a while. Most quantum companies focus on more universal quantum technology that is “gate-based,” where complex commands are run in a sequence, Baratz explained. While this can potentially solve a broader range of problems than D-Wave’s annealing, it is also very sensitive to errors and will likely take many years to commercialize.
More news below.
Contact CEO Daily via Diane Brady at diane.brady@fortune.com
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Generative AI in Financial Services A Deloitte survey of over 500 financial services leaders revealed that gen AI has become an increasingly valuable tool for these organizations – especially among early adopters of the technology. Learn More. |
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More tariffs. President Trump imposed a 25% tariff on all foreign cars imported into the U.S. The intent is to incentivize automakers to build vehicles within the U.S. The Dow Jones U.S. auto manufacturers index dropped 5% on the news and Tesla declined 5.6%.
Trump warned Europe and Canada: “If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” he wrote on Truth Social.
Europe is likely to respond aggressively anyway, according to German Economy Minister Robert Habeck.
Trump on TikTok: The president offered to lower tariffs on Chinese goods if Beijing agrees to sell TikTok to non-Chinese interests.
The story of Real America’s Voice. Conservative media network Real America’s Voice has surfed the Trump train from obscure network to a member of President Trump’s press pool. Fortune spoke with six former employees at RAV and a variety of other sources to get the context behind its rise.
Pfizer vaccine investigation: Prosecutors have begun probing whether Pfizer delayed an announcement on its successful vaccine for Covid until after Trump had lost the 2020 election. Trump has long believed the vaccine was to prevent the good news coming out during his first presidency. Pfizer denies the allegations.
Bumble CEO returns. Whitney Wolfe Herd returned as CEO of Bumble this month following a tumultuous year that saw the dating app’s share price fall 90% from its 2021 peak. Wolfe Herd spoke to Fortune about giving Bumble a self-love focus and experiencing “ego-death” when she stepped down as CEO.
Is private credit in a bubble? “The biggest question I get from everybody around the globe is, is private credit a bubble?” according to Apollo Global Management president Jim Zelter. “And I would say it’s not a bubble, but it’s certainly been long in the tooth in the cycle."
Pete Hegseth latest: The defense secretary insisted the information he published about an upcoming airstrike on Yemen in a non-private Signal group chat was not classified. Some Republicans in Congress aren’t buying it.
Sitting down with Mark Lore. Billionaire and serial entrepreneur Marc Lore can’t sit still despite all of his success. He sat down with Fortune’s Jason Del Rey to detail his troubled childhood, success in business, and why he now wants to create the Amazon of food delivery.
The markets
• The VIX fear index rose 8.3% yesterday on news of Trump’s auto tariffs and as sure as night follows day the S&P 500 tumbled, ending the day down 1.12%. The index is now down 2.9% YTD. The Nasdaq Composite fell 2%; Nvidia was one of its worst performers, declining 5.7%. Europe woke up on the wrong side of the bed this morning as the auto tariff situation wiped 0.6% off the Euro Stoxx 600 in early trading. S&P futures were flat pre-market.
From the analysts
• Panmure Liberum on Germany’s stimulus package: “Headline inflation in the Eurozone rises by about 0.2% three to four years after a fiscal stimulus of 1% of GDP. The stimulus packages for the EU and Germany are much larger than that [12% of GDP], so there will be more inflation, but the buildup will be gradual and will not come as a shock as in 2022. Hence, businesses have time to adapt,” per Joachim Klement.
• JPMorgan on AI in China: “DeepSeek is now being widely adopted by mainland corporates for cost savings,” per Wendy Liu et al.
• Convera on the declining U.S. dollar: “Hopes that Trump’s tariffs would boost US growth have been replaced by fears of stagflation and recession, with investors increasingly skeptical of the administration’s economic strategy. Consumer confidence took a significant hit in March, with the Conference Board’s index dropping to 92.9, its lowest level in four years. The expectations component was particularly weak, plunging nearly 10 points to a 12-year low. Households appear to be growing more anxious about rising prices and deteriorating economic conditions,” per Boris Kovacevic.
• Goldman Sachs on inflation: “Nearly all survey- and market-based measures of US inflation expectations for the coming year have risen. But the University of Michigan measure is an outlier both because its short-term measure has risen more substantially, all the way to 4.9%, and because its long-term measure has also risen to the highest rate since 1993. … both high inflation and high survey-based inflation expectations raise the bar for possible rate cuts this year. [But] if the economic data deteriorate enough, however, we think Fed officials would not be deterred from cutting,” per Jan Hatzius et al.
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