Abundance Is at Our Doorstep

What a ridiculously fun week at The Bleeding Edge…

I hope that everyone shared a sense of wonder, awe, inspiration, and pragmatism from the topics that we explored this week.

If you missed out on any of my research this week, I encourage you to have a dig through some of the issues.

It was certainly a big week for the aerospace industry – one pioneer in particular.

We spotlighted giant robotic arms catching a 23-story rocket returning from space (The “Impossible” Catch)… four massive rocket launches in just 40 hours… missions to Jupiter’s Europa to search for signs of extraterrestrial life (Space Sushi)… and that’s all from just one company.

Coming back down to earth, we explored self-driving robotaxis that don’t even have a steering wheel… and humanoid robots mingling at a party (The Future Should Look Like the Future).

It’s the future. It’s not just a dream or aspiration. It’s real, it’s here, and it’s happening now.

And finally, finally, corporations are taking the lead to fund the construction of clean energy power plants instead of fiddling with financial instruments (Capitulation of the Greenwashers). Some key Big Tech players are stepping up to say they’re done waiting for the government to get on board with the nuclear-powered future and are building it themselves.

It signals a major turning point in the artificial intelligence power struggle, and that will usher in the next generation of AI – artificial general intelligence (AGI) – that we’ve been waiting for.

Abundance is at our doorstep. It’s ours for the taking…

We have so much to look forward to.

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Space Travel

Jeff,

What I don’t understand about light-speed travel – esp., faster than light – is that we can only “see” at the speed of light, so anything we might crash into along the way we’d never see coming because we’d hit it before we ever saw it. We couldn’t detect it with any instrument either.

So, why so much noise about traveling to other planets? Sure, it’s fascinating to imagine. After all, much has come out from Hollywood in this regard, but it’s all nonsense. Or am I missing something?

I don’t mean to be a killjoy, but maybe there really is a limit on what man can do and maybe we should spend more resources on ways we can protect and preserve the planet we ARE on! I don’t feel like we’ve earned the right to explore until we’ve cleaned up our own act.

 – Graham L.

Hi Graham,

You’re definitely not a killjoy. Your question is very pragmatic, precisely the kinds of things we explore in The Bleeding Edge.

I scratched the surface of this topic earlier this week in The Bleeding Edge – Space Sushi:

What’s next? How will long-distance space travel ever be actually possible?

How are we going to shorten the duration of our trips to other worlds?

Elon Musk is already thinking about trips much farther afield. Earlier this year he said:

This Starship is designed to traverse our entire solar system and beyond to the cloud of objects surrounding us. A future Starship, much larger and more advanced, will travel to other star systems.

Is that even possible?

New propulsion systems will have to be developed to speed the long journeys. The industry will likely start small, with small spacecraft, for testing before scaling to larger spacecraft capable of transporting humans and supplies.

But the planning is already well underway.

In 2016, internet tycoon Yuri Milner and physicist Stephen Hawking announced the Breakthrough Starshot Project – to develop a method of propulsion capable of reaching 20% of the speed of light.

The project envisions gram-scale robotic spacecraft that carry cameras, photon thrusters, power supply, navigation, and communication equipment. The idea is to use a light sail and a light beamer to emit 100 gigawatts to propel the gram-scale spacecraft to remarkable speeds.

If achieved, this would enable us to send tiny spacecraft to the nearest star system to our solar system, Alpha Centauri, 25 trillion miles away (4.37 light-years). That trip would be possible in just 20 years. A couple of years ago, you might have written off this issue of The Bleeding Edge as “too far out there, Jeff.” Interesting, sure, but relevant to us, in our lifetimes? In the next 5 to 10 years, even? Certainly not investable…

But my longtime readers who have been paying close attention know better.

Up until now, it’s been just humans figuring all this out by hand, so to speak, constrained by our own limitations in time, our biological needs, and our ability to leverage computers.

But as we well know, something very special has happened with artificial intelligence (AI) technology, specifically neural networks. AI now can generate work, answers, and novel outputs that have already transformed certain areas of research.

The rules have changed. And AI has no biological needs. The only constraint is electricity, and if there is plenty of that, there is no constraint at all.

The timelines for any field of research are being rewritten. Propulsion, materials, and other forms of aerospace technology are no different.

So, no, the idea of space travel to other star systems isn’t nonsense. But it is a challenging problem to solve because of the distances involved and our current inability to travel quickly through space.

With regards to your question about traveling faster than the speed of light, there’s some nuance.

While only theoretical, one method of traveling across long distances is through a wormhole. A wormhole is the warping of the fabric of spacetime.

A simple explanation is to imagine a piece of paper with two destination points on either end. They are far from one another. But then bend the paper and imagine a tunnel between the two dots. Now, their distance is very short traveling through another dimension.

This may be possible in our universe, and there would be no risk of crashing into anything.

Another possibility might be to have a warp drive which also warps the fabric of spacetime. It compresses space in front of a spacecraft and expands space behind the spacecraft.

Most of space is just vast stretches of nothingness, so not much risk of crashing into anything at all. And I’m absolutely sure that by the time we have warp drive technology, we’ll have space mapped out in incredible detail.

And you’re right, the world needs to do a better job managing its presence on Earth. Sadly, some are intentionally creating more war, not peace, for profit and other malicious ends. But there will always be bad actors and the risk of a devastating nuclear war.

This is precisely why humanity benefits from having a backup plan.

And thanks to Musk and his team at SpaceX – and its rocket technology – it has made access to space an economically productive activity, as opposed to a taxpayer-funded program through NASA.

The space economy, which includes expansion to the moon and Mars, will grow GDP and create incredible opportunities for both jobs and investment.

We can and should persist to improve both our terrestrial and extraterrestrial existences.

CRISPR

Your writing about CRISPR has caused me to search a cloudy shelf in my memory of Jeff Brown writing about machines being developed that could analyze a person’s DNA and the cost had dropped below $300 (before inflation). It would allow medical people the possibility to edit flawed DNA. I’m probably way off, but I wondered if that had progressed any.

Thanks for coming back to publishing stimulating articles about future possibilities.

– Frederick K.

Hi Frederick,

I’m happy to share some fabulous news with you. This is no longer a future possibility. It is very real and available today.

I remember like it was yesterday… back in 2015 and 2016 when I was going to conferences in genetics and genetic engineering. These often tended to be small, sometimes fewer than 100 people.

The room was full almost entirely of PhDs in genetics… and then there was me, the oddball, with no formal training in genetics at all.

I had several polite arguments during those events as I was probing the technology and state of the industry. The “experts” insisted that it would be decades before we could use genetic engineering to change unwanted mutations in our DNA to cure a disease.

I insisted that we would prove that it worked in clinical trials in less than five years and our first FDA approval would happen within a decade – i.e., before 2025.

They all thought I was crazy. None of them agreed with me. Not a single one.

And yet, my predictions have been proven to be spot on. 100% accurate.

Several companies using CRISPR technology demonstrated the efficacy of using genetic editing in clinical trials to cure human disease, and Vertex (VRTX) – in collaboration with CRISPR Therapeutics (CRSP) – already has FDA approval for CASGEVY.

It’s a CRISPR-based genetic editing therapy for sickle cell disease and beta thalassemia. And it works. Remarkably well. Nearly 94% of sickle cell patients experienced no pain episodes in 12 months following treatment.

This is just the beginning of what will become a flood of genetic therapies using CRISPR, and other related forms of genetic editing like base editing and prime editing.

And within 12–18 months, we can expect that the costs to sequence a whole human genome will drop to around $100. This is when we’ll start to see insurance coverage for sequencing and clinical readouts for patients.

This will completely transform the healthcare industry and improve patient outcomes for the better. We have so much to look forward to.

(Our) Life on Mars

Sadly, the lack of a magnetic field makes colonizing, or at least terraforming, Mars problematic, water or not.

– Robert S.

Hi Robert,

Thanks for writing in with the fantastic question, as this is a very interesting subject.

Your question was penned in response to an issue I wrote some weeks back, The Bleeding Edge – The Most Valuable Commodity in Our Universe, wherein I drew parallels between the fictional planet of Arrakis in Frank Herbert’s Dune and our own solar system’s Red Planet, Mars…

Both Arrakis and Mars are desert planets with extreme temperatures. Both have no surface water. And they are both orbited by two moons. Mars’ two moons are Phobos and Deimos.

And while there is no evidence of massive sandworms or Melange on Mars, research published this week indicates that the two planets now have one more thing in common…

Massive, underground aquifers of water.

The most valuable commodity in our universe to sustain life.

As I wrote in that issue, Mars has long been humanity’s best hope of becoming a multi-planetary species.

For everyone’s benefit, Earth’s magnetic field is what protects our planet from the sun’s charged particles. It’s what protects our atmosphere from being stripped away from Earth. Without it, we’d be in trouble.

So to your point, without a magnetic field, there is little hope of terraforming Mars.

But this is an engineering problem that could be solved. One of the prevailing ideas is to create a charged particle ring around Mars by ejecting matter from one of Mars’ moons, most likely Phobos.

Another promising engineering solution would be to use nuclear fusion reactors, which will have excellent energy density, to create an artificial magnetosphere around Mars.

Given the latest advancements in nuclear fusion, combined with a spacecraft like the Starship, getting fusion reactors to Mars is not far-fetched at all.

But we won’t need to engineer a magnetic field, or terraform Mars, to establish a Martian outpost.

We can still create both surface and subterranean habitation modules, greenhouses for food, and research modules for a sustainable Martian outpost. Again, with the Starship and enough material, this is something that could scale up over time.

A terraformed Mars is an amazing thought, but our most likely path forward to establishing a presence on Mars, at least in the next 20 years, will be the latter.

Thanks again.

Rigetti Computing

Hi Jeff,

Welcome back. We used to hold a position in Rigetti Computing (RGTI) in the Exponential Tech portfolio. I retained a very small position back when we were advised to sell the position because of your fundamental analysis of the stock and out of the hopes it may turn around. The story was very compelling.

Do you still feel that Rigetti is one of the top quantum computing plays out there? And if so, would you consider reintroducing Rigetti as a buy recommendation back into your service? I’m a very skilled technical analyst but lack the fundamental insights into the companies that you possess.

Technically, it has been forming a bottom on the monthly chart for quite some time and looks as though it has the potential to break out above the monthly 10MA and stay above there for a while. I’m wondering if you could provide any fundamental and/or macro analysis that may support this.

Thanks for all you do.

– Scott S.

Hi Scott,

Rigetti is still one of the clear leaders in the industry, and despite the general malaise around small-cap growth stocks right now, the company continues to make impressive progress with its quantum computing technology.

The biggest change in the last two years with Rigetti is that it has developed a new architecture for its quantum computers called Ankaa. This new architecture has made some major improvements in gate fidelity, and Ankaa will be the architecture that Rigetti will use for its large-scale quantum computing systems (i.e. hundreds of qubits).

We can see the progress that Rigetti has made in the simple chart below:

We can see how Rigetti’s error rates have been falling quickly with the new Ankaa architecture and we can expect to see some major improvements as we look ahead into 2025.

Rigetti’s quantum computing architecture scales easily. The next big product release will be an 84-qubit system which will be coming in the months ahead. And as the fidelity improves, the utility of the quantum computer skyrockets as it can take on more complex computing tasks.

No matter how big we build AI data centers, there are still problems that are not solvable in any reasonable amount of time (or cost) with classical computing systems (even those enhanced with AI). That’s where quantum computing comes into play.

Quantum computers also have the added benefit of being far more efficient in terms of power consumption. For a similar amount of processing, a Rigetti quantum computer requires less than 2% of the electricity as that of a supercomputer. It’s night and day.

But putting the fundamentals aside, the bigger challenge for smaller capitalization growth companies like Rigetti is the lack of broad institutional support.

Due to the high interest rates and current economic environment, most of the institutional focus has been on large-cap growth stocks, and stocks that benefit from an inflationary environment.

And the small capitalization stocks that get attention are those that are generating free cash flow and growing their free cash flow (i.e. they don’t have to worry about needing to raise any additional capital via a secondary offering).

Rigetti is cheap right now, it should easily be trading two or three times higher than it is today. It’s trading at just a $105 million enterprise valuation. I could make a strong argument that Rigetti’s intellectual property portfolio alone is worth more than $105 million.

Its annual sales in 2025 will grow to around $25 million. Its gross margins are expanding from around 65% this year to 72.5% next year, and it has $100 million in cash. These metrics combined with the fundamentals of Rigetti’s technology look great, right?

The problem right now, in this high-interest-rate environment, is that institutional capital isn’t interested in companies that are burning cash.

Rigetti hasn’t yet reached free cash flow breakeven, and it won’t next year either. It’s still in research and development mode. It is investing in growth.

But that also means that sometime in the next 18 months, it will have to raise capital via a secondary offering, which will typically dilute existing shareholders by 10–15%.

When interest rates drop and institutional capital rotates into small-cap growth stocks, companies like Rigetti will be back in fashion. Right now, they are not.

This is a great company, with the potential to transform the computing industry. We just need interest rates to come down and see a sector rotation into small-cap growth stocks for this to become a great investment opportunity. That, or Rigetti becomes free cash flow positive. Whichever comes first.

That’s all the time we have for this week’s AMA. Thanks to all of you for writing in. As always, it’s a pleasure to hear from you.

We’d love to hear what you think about any and all of this week’s insights. What are your thoughts on the new age of space exploration we’re approaching? Are you excited about Big Tech’s push to reopen and establish new nuclear facilities to power the AI data center buildout?

Let us know. You can always reach us right here.

Have a great weekend, everyone.

Regards,

Jeff