Cyber Wars, Hackers and the Solution
21st Century Battles - Both Corporate and National - Are Being Fought In CyberSpace
DISCLAIMER & DISCLOSURE: The author holds a small speculative position in ARQQ but has no investments in other companies mentioned at the date of publication but that may change. The views expressed are those of the author and may change without notice. The author has no duty or obligation to update this information. Some content is sourced from third parties believed to be reliable, but accuracy is not guaranteed. Forward-looking statements involve assumptions, risks, and uncertainties, meaning actual outcomes may differ from those envisaged in this analysis. Past performance is not indicative of future results. All investments carry risk, including financial loss. This analysis is for educational purposes only and does not constitute investment advice or recommendations of any kind. Conduct your own research and seek professional advice before investing.
What?
As ransomware attacks grind critical infrastructure to a halt and state-sponsored hackers slip deeper into sensitive national networks, it’s clear the world is in urgent need of smarter, stronger defenses.
Typically, when a system gets hacked, the response is reactive, patching vulnerabilities. Yet one company is revolutionizing encryption with technology that transforms static defenses into dynamic, virtually impenetrable barriers.
Imagine you're working remotely, handling classified information, a scenario that's becoming increasingly common for government agencies and enterprises alike. You can’t afford for that information to fall into the wrong hands, but you need to send it across cyber space - so what do you do? The solution isn't simply locking everything down - that would introduce security but at too high a cost. It would be cumbersome and slow operations to a crawl to the point of becoming unworkable. What’s needed is a smarter kind of protection - something that works seamlessly in our fast moving mobile-first world.
This is exactly what the collaboration between Equus Compute Solutions, Arqit Quantum (Nasdaq: ARQQ, ARQQW), and Intel (Nasdaq: INTC) aims to solve with their innovative approach to mobile classified data access.
Let’s explore what this solution looks like and how investors are able to gain exposure to this exciting opportunity.
Why?
The timing couldn't be more critical. Just look at the devastating breaches we've witnessed recently: the MGM Resorts attack that exposed guest data and crippled operations for days, costing an estimated $100 million in damages; the massive 23andMe breach that compromised genetic profiles of millions; or the alarming SolarWinds supply chain attack that gave hackers access to thousands of organizations including multiple U.S. federal agencies. These incidents remind us that traditional security approaches are failing spectacularly in our hyper-connected world - and as computing becomes more sophisticated, the stakes keep rising.
The problem that the Intel, Arqit and Equus team is tackling is two-fold and quite fascinating.
On one hand, we're facing an imminent threat from quantum computing - those super-powered machines that could potentially crack our current encryption methods like an egg. Consider that experts believe quantum computers capable of breaking RSA encryption could be operational within the decade.
On the other hand, the old-school ways of managing encryption keys (think physical handoffs and manual processes) simply don't scale for modern operations, especially when officials and executives need to access nation-critical information while traveling or working from remote locations.
The beauty of their approach is how it solves multiple problems at once. In an era when the Chinese government is accused of hacking into telecommunications networks and critical infrastructure, and Russian-affiliated groups continue targeting everything from government agencies to healthcare systems, this solution guards against both current threats and the quantum computing challenges looming on the horizon. It replaces complex, manual processes with automated, scalable systems - the kind that might have prevented incidents like the Microsoft Exchange Server breach that affected over 30,000 organizations in the U.S. alone.
How?
So this team’s solution cleverly builds upon the NSA's Commercial Solutions for Classified program, specifically the Mobile Access Capability Package. What makes this approach special is how it creates two layers of encrypted tunnels (what they call an "Enterprise Gray" architecture) without relying on specialized hardware. It's like having two ultra-secure doors that someone would need to break through, and both doors use commercial, off-the-shelf components rather than exotic, expensive hardware. This is a radical departure from the clunky, purpose-built encryption devices that have historically cost government agencies millions while limiting mobility and flexibility.
What's particularly revolutionary about this setup is Arqit's SKA-Platform, which generates quantum-resistant encryption keys that can be refreshed multiple times every second. Imagine if, during the Colonial Pipeline ransomware attack, the hackers had gained access through a single compromised VPN password that didn't have multi-factor authentication. Now contrast that with a system where the encryption keys change so frequently that stolen credentials become worthless almost instantly. This eliminates the logistical nightmare of traditional key management while creating a moving target that's virtually impossible to hit.
The Intel side of the equation brings some serious muscle to the table with their NetSec Accelerator cards. These combine Ethernet controllers with powerful Xeon D processors to handle all the complex cryptography without slowing everything down. Consider that many organizations still struggle with the performance trade-offs of implementing even basic encryption - users complain, productivity suffers, and in some cases, security measures get disabled for convenience. This solution turns that problem on its head by making high-security encryption practically invisible from a performance standpoint.
Wow!
When they tested this solution between labs in California and Oregon, not only did it work seamlessly across a real-world environment, but the performance numbers were impressive too. Even with two layers of heavy-duty, quantum-safe encryption, they only saw about a 9% decrease in network speed compared to no encryption at all. Compare this to some VPN solutions that can slash connection speeds by 30-50%, and you begin to see why this represents such a leap forward.
For organizations handling sensitive information in today's increasingly mobile world, this solution represents a paradigm shift - a way to embrace flexible, remote work while keeping classified data locked down tight against even the most advanced future threats. Imagine military commanders securely accessing battle plans from forward positions, diplomats communicating sensitive negotiation details while traveling abroad, or corporate executives reviewing acquisition strategies while on the road - all without fear that their communications could be intercepted or decrypted, now or decades into the future.
This is more than an incremental improvement; it's security that fundamentally works with modern needs rather than against them. As ransomware attacks continue to double year over year and nation-state hacking becomes more sophisticated, solutions like this aren't only nice to have, they're essential to maintaining operational security in an increasingly hostile digital landscape. The MACP architecture prepares us for tomorrow's threats before they even materialize.
Is Arqit Quantum A Good Investment?
Arqit Quantum is one of those companies that really catches your eye if you're into bold, high-risk, high-reward plays. It’s tackling quantum-era cyber threats with a futuristic solution: quantum-resistant encryption. That alone puts it in a pretty exciting space.
Now, Arqit isn’t exactly a household name. This is a fairly new company, brought to market via a SPAC, which has seen its share price go on a roller-coaster of a ride. The price doubled not long after its debut, then took a hard nosedive. But don’t let that put you off - it’s not uncommon for early-stage tech firms. Even Amazon’s stock, after launching at $18, soared above $100 and then crashed all the way down to $6 before eventually taking off.
So, does Arqit have the tech to follow a similar bounce-back story?
The collaboration with Intel, a tech giant, and Equus Compute Solutions, suggests Arqit has developed technology compelling enough to attract major partners. These partners bring serious credibility and know-how, which could fast-track Arqit’s journey from niche player to industry force.
Arqit's quantum-resistant keys offer military-grade protection with minimal network slowdown, positioning the company to potentially capture significant share of the $200+ billion cybersecurity market.
Having a solution that is aligned with the NSA's Commercial Solutions for Classified program, indicates potential government adoption pathways. Government cybersecurity contracts tend to be lucrative and long-term once established, so recurring revenues could be high and being a software based service, margins are likely to be very strong.
Sure, you could gain exposure by investing in Intel, but tech giants like this dabble in many areas, and success in one of its side bets barely moves the needle. In stark contrast, Arqit is a pure-play and success in this space would be transformational. If quantum encryption takes off it could propel Arqit’s valuation to many multiples of where it is today.
In short: Arqit Quantum isn’t for the faint-hearted, but if you’re looking for targeted exposure to a potentially massive tech trend, it’s definitely one to keep on your radar.
I’ve done my best to break this down, but if you want a more technical understanding with schemas, please see this document:
