Squeezing of quantum fluctuations by means of entanglement is a well-recognized goal in the field of quantum information science and precision measurements. In particular, squeezing the fluctuations via entanglement between 2-level atoms can improve the precision of sensing, clocks, metrology, and spectroscopy. Here, we demonstrate 3.4 dB of metrologically relevant squeezing and entanglement for ≳ 105 cold caesium atoms via a quantum nondemolition (QND) measurement on the atom clock levels. We show that there is an optimal degree of decoherence induced by the quantum measurement which maximizes the generated entanglement. A 2-color QND scheme used in this paper is shown to have a number of advantages for entanglement generation as compared with a single-color QND measurement.
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