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RIM's Mike Lazaridis Takes A Quantum Leap Of Faith In Waterloo

RIM cofounder Mike Lazaridis has spent more than $250 million to establish a new tech hub in . . . Waterloo, Ontario?

RIM cofounder Lazaridis has invested a large fortune to raise the tech profile of his hometown. | Photo by Christopher Wahl

Mike Lazaridis will admit that Waterloo, Ontario, is not often confused with Silicon Valley. It has no ocean beaches nearby. It has fewer Teslas and private jets. It gets substantial amounts of snow, and people there talk more about hockey than angel investors. Above all, Waterloo, located roughly 70 miles west of Toronto, is not a place that comes to mind when you mull the future of technology.

That may soon change. Lazaridis—the cofounder of RIM, which makes BlackBerry, and an engineer often credited with inventing the smartphone—is giving vast amounts of his personal wealth to transform this region into a global tech leader. In fact, even as Waterloo-based RIM has stumbled, surrendering its market dominance to Apple and Samsung (and even as Lazaridis relinquished control of the company last year), he has bet hundreds of millions of dollars on a risky vision for the future. This place has no real valley, Lazaridis says of Waterloo, and very little silicon. But he believes it can become what he describes as the world's "quantum hub."

His vision—especially the quantum part—takes a bit of explaining. The best place to begin is with an organization in Waterloo called the Perimeter Institute. Lazaridis endowed Perimeter 12 years ago with $100 million. He later put in $70 million more. Over the past decade, the facility has grown to employ about 150 of the world's deepest thinkers. Perimeter's goal, as Lazaridis sees it, is to become a leading center for physics theory.

What $160 million gets you: The University of Waterloo's Quantum-Nano Centre opened in late 2012.

To Lazaridis, Perimeter was the first act. The second act involves his efforts—aided by the Canadian government and the University of Waterloo—to make his hometown a leader in the nascent field of quantum computing. "There is now a race to build a quantum computer," Lazaridis says. To win that race against competitors both in North America (IBM and Yale each have dedicated labs) and overseas (France and Germany are among the leaders), he has donated well over $100 million toward UWaterloo's Institute for Quantum Computing (IQC). His largesse funded the construction of the Quantum-Nano Centre—a huge, modernistic building on the campus that is designed to be virtually impervious to vibrations, thus making it ideal for work in quantum physics.

Why do this? To Lazaridis, quantum computing portends a seismic technological shift—one he believes could be a huge boost to Canada's economy. In today's computers, processors control the behavior of transistors with microbursts of electricity, turning them off and on to represent information as 1s or 0s—a representation that is called a "bit." A quantum computer is different. Rather than using transistors, it taps the peculiar properties of matter itself to do the calculations. These machines don't use bits; they use "qubits," whose position can stand for both 1 and 0 at the same time. This property allows a quantum computer to do a tremendous number of calculations simultaneously. For certain applications—say, code breaking—such capabilities make it far faster than any conventional computer presently in existence. You might think of today's machines as a locksmith trying to open a lock with dozens of keys, one after another. A quantum computer will be like the locksmith trying to open a lock with all his keys at once.

In Waterloo and similar labs around the world, there are now quantum computers that use 2 or 4 or 8 qubits; these computers utilize differing designs and usually look more like a cryogenic garbage can than an elegant laptop. (They're sometimes supercooled to nearly -270 degrees Celsius.) Unfortunately, the machines have about the computational power of 1970s-era calculators. But a computer with 60 qubits? Such a machine is likely 15 years off, says Raymond Laflamme, the head of the IQC. Yet if you had one now, it could overpower current encryption systems, wreaking havoc on the Internet. A big quantum computer could conceivably do good things, too, such as model pharmaceuticals to discover new drugs or create novel options for digital security. This explains Lazaridis's enthusiasm. "The quantum computer isn't just 10 times faster than a Pentium," he says. "It's a whole different scale."

It's worth noting that not everyone in Waterloo has qubits on the mind. The region has been enjoying a small-scale tech boom, fueled by UWaterloo graduates and a growing ecosystem of more conventional tech firms. Beyond RIM, Waterloo is home to OpenText (Canada's largest software company) and Christie Digital Systems (a leading producer of visual displays). Concurrently, entrepreneurs are increasingly setting up shop in the area, says Iain Klugman, CEO of Communitech, an outfit that promotes and tracks the region's tech startups. "Activity is at an all-time high, he says. "It's absolutely exploding."

To Klugman, Lazaridis-led endeavors like Perimeter or IQC are invaluable magnets for talent; in recent years, both organizations have attracted top scholars from MIT and Cambridge. Thus, there's a potential for kinetic reaction: First you get the best people, then you get the best students. Already, there are signs this is happening. "Something is going on in Waterloo," says Y Combinator founder Paul Graham, "because the applications we get from Waterloo students are better than those we get from students of any other university."

Admittedly, it's too early to start packing for the great white north. The race to build a quantum computer is a global competition—just like the race to build the next Silicon Valley. So you could dismiss Larazidis's vision as intriguing and ambitious and ultimately a long shot. Still, he insists Waterloo is only halfway through an evolution that will take another 10 or 20 years. What's more, he's used to people telling him he's crazy. When he told his lawyer a dozen years ago that he wanted to put $100 million—about a third of his wealth at the time—into a theoretical physics institute, his lawyer asked if he'd lost his mind.

But the notion that a single person can help a city cultivate a global startup culture is hardly far-fetched: Palo Alto was mainly apricot orchards until a Stanford official named Frederick Terman began wooing tech companies in the 1950s to work near campus. Lazaridis has absorbed that lesson. And really, he's had nuttier ideas before. A while back, he believed that at some point in the future, everyone would be walking around with a smartphone.

A version of this article appeared in the February 2013 issue of Fast Company magazine.