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    Success at the intersection of technology and finance

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    Citadel founder and CEO Ken Griffin had some free advice for an at-capacity crowd of MIT students at the Wong Auditorium during a campus visit in April. “If you find yourself in a career where you’re not learning,” he told them, “it’s time to change jobs. In this world, if you’re not learning, you can find yourself irrelevant in the blink of an eye.”

    During a conversation with Bryan Landman ’11, senior quantitative research lead for Citadel’s Global Quantitative Strategies business, Griffin reflected on his career and offered predictions for the impact of technology on the finance sector. Citadel, which he launched in 1990, is now one of the world’s leading investment firms. Griffin also serves as non-executive chair of Citadel Securities, a market maker that is known as a key player in the modernization of markets and market structures.

    “We are excited to hear Ken share his perspective on how technology continues to shape the future of finance, including the emerging trends of quantum computing and AI,” said David Schmittlein, the John C Head III Dean and professor of marketing at MIT Sloan School of Management, who kicked off the program. The presentation was jointly sponsored by MIT Sloan, the MIT Schwarzman College of Computing, the School of Engineering, MIT Career Advising and Professional Development, and Citadel Securities Campus Recruiting.

    The future, in Griffin’s view, “is all about the application of engineering, software, and mathematics to markets. Successful entrepreneurs are those who have the tools to solve the unsolved problems of that moment in time.” He launched Citadel only one year after graduating from college. “History so far has been kind to the vision I had back in the late ’80s,” he said.

    Griffin realized very early in his career “that you could use a personal computer and quantitative finance to price traded securities in a way that was much more advanced than you saw on your typical equity trading desk on Wall Street.” Both businesses, he told the audience, are ultimately driven by research. “That’s where we formulate the ideas, and trading is how we monetize that research.”

    It’s also why Citadel and Citadel Securities employ several hundred software engineers. “We have a huge investment today in using modern technology to power our decision-making and trading,” said Griffin.

    One example of Citadel’s application of technology and science is the firm’s hiring of a meteorological team to expand the weather analytics expertise within its commodities business. While power supply is relatively easy to map and analyze, predicting demand is much more difficult. Citadel’s weather team feeds forecast data obtained from supercomputers to its traders. “Wind and solar are huge commodities,” Griffin explained, noting that the days with highest demand in the power market are cloudy, cold days with no wind. When you can forecast those days better than the market as a whole, that’s where you can identify opportunities, he added.

    Pros and cons of machine learning

    Asking about the impact of new technology on their sector, Landman noted that both Citadel and Citadel Securities are already leveraging machine learning. “In the market-making business,” Griffin said, “you see a real application for machine learning because you have so much data to parametrize the models with. But when you get into longer time horizon problems, machine learning starts to break down.”

    Griffin noted that the data obtained through machine learning is most helpful for investments with short time horizons, such as in its quantitative strategies business. “In our fundamental equities business,” he said, “machine learning is not as helpful as you would want because the underlying systems are not stationary.”

    Griffin was emphatic that “there has been a moment in time where being a really good statistician or really understanding machine-learning models was sufficient to make money. That won’t be the case for much longer.” One of the guiding principles at Citadel, he and Landman agreed, was that machine learning and other methodologies should not be used blindly. Each analyst has to cite the underlying economic theory driving their argument on investment decisions. “If you understand the problem in a different way than people who are just using the statistical models,” he said, “you have a real chance for a competitive advantage.”

    ChatGPT and a seismic shift

    Asked if ChatGPT will change history, Griffin predicted that the rise of capabilities in large language models will transform a substantial number of white collar jobs. “With open AI for most routine commercial legal documents, ChatGPT will do a better job writing a lease than a young lawyer. This is the first time we are seeing traditionally white-collar jobs at risk due to technology, and that’s a sea change.”

    Griffin urged MIT students to work with the smartest people they can find, as he did: “The magic of Citadel has been a testament to the idea that by surrounding yourself with bright, ambitious people, you can accomplish something special. I went to great lengths to hire the brightest people I could find and gave them responsibility and trust early in their careers.”

    Even more critical to success is the willingness to advocate for oneself, Griffin said, using Gerald Beeson, Citadel’s chief operating officer, as an example. Beeson, who started as an intern at the firm, “consistently sought more responsibility and had the foresight to train his own successors.” Urging students to take ownership of their careers, Griffin advised: “Make it clear that you’re willing to take on more responsibility, and think about what the roadblocks will be.”

    When microphones were handed to the audience, students inquired what changes Griffin would like to see in the hedge fund industry, how Citadel assesses the risk and reward of potential projects, and whether hedge funds should give back to the open source community. Asked about the role that Citadel — and its CEO — should play in “the wider society,” Griffin spoke enthusiastically of his belief in participatory democracy. “We need better people on both sides of the aisle,” he said. “I encourage all my colleagues to be politically active. It’s unfortunate when firms shut down political dialogue; we actually embrace it.”

    Closing on an optimistic note, Griffin urged the students in the audience to go after success, declaring, “The world is always awash in challenge and its shortcomings, but no matter what anybody says, you live at the greatest moment in the history of the planet. Make the most of it.” More

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      A new way for quantum computing systems to keep their cool

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      Heat causes errors in the qubits that are the building blocks of a quantum computer, so quantum systems are typically kept inside refrigerators that keep the temperature just above absolute zero (-459 degrees Fahrenheit).

      But quantum computers need to communicate with electronics outside the refrigerator, in a room-temperature environment. The metal cables that connect these electronics bring heat into the refrigerator, which has to work even harder and draw extra power to keep the system cold. Plus, more qubits require more cables, so the size of a quantum system is limited by how much heat the fridge can remove.

      To overcome this challenge, an interdisciplinary team of MIT researchers has developed a wireless communication system that enables a quantum computer to send and receive data to and from electronics outside the refrigerator using high-speed terahertz waves.

      A transceiver chip placed inside the fridge can receive and transmit data. Terahertz waves generated outside the refrigerator are beamed in through a glass window. Data encoded onto these waves can be received by the chip. That chip also acts as a mirror, delivering data from the qubits on the terahertz waves it reflects to their source.

      This reflection process also bounces back much of the power sent into the fridge, so the process generates only a minimal amount of heat. The contactless communication system consumes up to 10 times less power than systems with metal cables.

      “By having this reflection mode, you really save the power consumption inside the fridge and leave all those dirty jobs on the outside. While this is still just a preliminary prototype and we have some room to improve, even at this point, we have shown low power consumption inside the fridge that is already better than metallic cables. I believe this could be a way to build largescale quantum systems,” says senior author Ruonan Han, an associate professor in the Department of Electrical Engineering and Computer Sciences (EECS) who leads the Terahertz Integrated Electronics Group.

      Han and his team, with expertise in terahertz waves and electronic devices, joined forces with associate professor Dirk Englund and the Quantum Photonics Laboratory team, who provided quantum engineering expertise and joined in conducting the cryogenic experiments.

      Joining Han and Englund on the paper are first author and EECS graduate student Jinchen Wang; Mohamed Ibrahim PhD ’21; Isaac Harris, a graduate student in the Quantum Photonics Laboratory; Nathan M. Monroe PhD ’22; Wasiq Khan PhD ’22; and Xiang Yi, a former postdoc who is now a professor at the South China University of Technology. The paper will be presented at the International Solid-States Circuits Conference.

      Tiny mirrors

      The researchers’ square transceiver chip, measuring about 2 millimeters on each side, is placed on a quantum computer inside the refrigerator, which is called a cryostat because it maintains cryogenic temperatures. These super-cold temperatures don’t damage the chip; in fact, they enable it to run more efficiently than it would at room temperature.

      The chip sends and receives data from a terahertz wave source outside the cryostat using a passive communication process known as backscatter, which involves reflections. An array of antennas on top of the chip, each of which is only about 200 micrometers in size, act as tiny mirrors. These mirrors can be “turned on” to reflect waves or “turned off.”

      The terahertz wave generation source encodes data onto the waves it sends into the cryostat, and the antennas in their “off” state can receive those waves and the data they carry.

      When the tiny mirrors are turned on, they can be set so they either reflect a wave in its current form or invert its phase before bouncing it back. If the reflected wave has the same phase, that represents a 0, but if the phase is inverted, that represents a 1. Electronics outside the cryostat can interpret those binary signals to decode the data.

      “This backscatter technology is not new. For instance, RFIDs are based on backscatter communication. We borrow that idea and bring it into this very unique scenario, and I think this leads to a good combination of all these technologies,” Han says.

      Terahertz advantages

      The data are transmitted using high-speed terahertz waves, which are located on the electromagnetic spectrum between radio waves and infrared light.

      Because terahertz waves are much smaller than radio waves, the chip and its antennas can be smaller, too, which would make the device easier to manufacture at scale. Terahertz waves also have higher frequencies than radio waves, so they can transmit data much faster and move larger amounts of information.

      But because terahertz waves have lower frequencies than the light waves used in photonic systems, the terahertz waves carry less quantum noise, which leads to less interference with quantum processors.

      Importantly, the transceiver chip and terahertz link can be fully constructed with standard fabrication processes on a CMOS chip, so they can be integrated into many current systems and techniques.

      “CMOS compatibility is important. For example, one terahertz link could deliver a large amount of data and feed it to another cryo-CMOS controller, which can split the signal to control multiple qubits simultaneously, so we can reduce the quantity of RF cables dramatically. This is very promising.” Wang says.

      The researchers were able to transmit data at 4 gigabits per second with their prototype, but Han says the sky is nearly the limit when it comes to boosting that speed. The downlink of the contactless system posed about 10 times less heat load than a system with metallic cables, and the temperature of the cryostat fluctuated up to a few millidegrees during experiments.

      Now that the researchers have demonstrated this wireless technology, they want to improve the system’s speed and efficiency using special terahertz fibers, which are only a few hundred micrometers wide. Han’s group has shown that these plastic wires can transmit data at a rate of 100 gigabits per second and have much better thermal insulation than fatter, metal cables.

      The researchers also want to refine the design of their transceiver to improve scalability and continue boosting its energy efficiency. Generating terahertz waves requires a lot of power, but Han’s group is studying more efficient methods that utilize low-cost chips. Incorporating this technology into the system could make the device more cost-effective.

      The transceiver chip was fabricated through the Intel University Shuttle Program. More