Intel’s $2.3 Billion Quantum Computing Bet Has Been a Decade in the Making

Intel has faced persistent challenges over the past decade. Growing competition from AMD has reduced its share of the server-chip market, Nvidia GPUs have benefited from the expansion of artificial intelligence, and the company’s foundry business has recorded billions of dollars in operating losses. Intel reported an $11 billion loss in its fiscal 2026 second quarter and was scheduled to release its latest quarterly results on October 29.

Under CEO Lip-Bu Tan, Intel is pursuing a turnaround focused on reducing costs and scaling back earlier expansion plans. The company is also benefiting from the shift from AI training to inference, a workload that relies more heavily on CPUs and could narrow the gap between CPUs and GPUs in AI infrastructure.

Despite these difficulties, Intel continues to invest in new areas. The company announced plans to acquire Classiq, a six-year-old Israeli quantum-software company, for $2.3 billion. The deal is expected to close in the second half of next year.

Building a quantum software business

Classiq’s platform helps developers create quantum algorithms and applications using tools that include AI natural-language models and a Python-like programming language. As quantum-computing development advances, companies are increasingly focusing not only on hardware and qubits, but also on software, algorithms, architectures, digital twins, and networking.

Intel has spent the past decade developing its own quantum-computing portfolio. It includes the Tunnel Falls QPU, a 12-qubit silicon chip based on the spin-qubit approach, as well as the Quantum SDK and Horse Ridge control chips, which were developed in 2019. Intel can manufacture its quantum chips using the same 18A-based process technology used for its conventional CPUs.

Intel CTO Pushkar Ranade said Classiq would help transform quantum computing from a research project into a commercial business.

“This effort on quantum computing is really preparing Intel for the future, for the next wave of computing,” Ranade told journalists. “Up until now, our quantum computing group for the last 10 years was purely a research-and-development project. It wasn't really viewed as a commercial activity. But we feel that given all of the traction, all of developments in the marketplace, the timing is right to start making the next steps towards commercialization, which is another reason why the Classiq acquisition is so important for us. It moves our quantum computing group from just a research-and-development focus to an actual quantum computing business.”

Nir Minerbi, Classiq’s co-founder and CEO, said the company was established to address a shortage of software infrastructure in quantum computing. Hardware development and work on issues such as error correction had advanced, but developers lacked a broadly accessible software stack.

“There were quite a few players, several modalities, amazing progress, but there was not much of a software stack,” Minerbi said. “No OS, no compiler, no development environment. Basically, the development was limited to gate-level programming, which is a bit like designing a chip at the transistor level. We established Classiq to build the operating system for quantum, the environment that allows anyone to develop software for quantum computers, not only the quantum experts.”

To make its platform independent of specific quantum hardware, Classiq adopted technologies used to scale classical computing, including electronic design automation, modeling, synthesis, and compilation. Minerbi said these capabilities are relevant to both Intel and the broader quantum-computing industry.

Intel’s hardware and foundry strategy

Minerbi said Intel already has several quantum-computing assets, including its own silicon-based QPU, control electronics, foundry services, simulation stack, and Quantum SDK. Combining those resources with software designed for end users could allow Intel to work with enterprises, governments, universities, quantum-cloud providers, high-performance computing systems, data centers, and other hardware vendors.

Classiq has more than four dozen enterprise customers. They include communications companies Comcast and AT&T, automakers BMW and Rolls-Royce, Oak Ridge National Laboratory, and IT firms NTT Data and Mphasis. Lufthansa and Wells Fargo are also among its customers. After the acquisition closes, these organizations will become Intel customers. Ranade acknowledged that Intel had not previously done much customer engagement or commercial development around its quantum technology.

Minerbi said Classiq generated “very healthy revenue this year” and expected strong revenue compound annual growth in the coming years. The company has raised approximately $200 million through multiple funding rounds during its six years of operation. Its valuation was estimated at between $400 million and $600 million in the previous year.

Classiq’s approximately 130 employees will also bring modality neutrality to Intel’s quantum strategy. Intel has focused its hardware efforts on spin qubits, in which particles such as electrons act like tiny magnets. Their spin can represent a computational 0 or 1, or remain in a superposition of both states. Microwave pulses, magnetic fields, and electrical tuning can be used to control and entangle the spins for quantum operations.

Other quantum-computing approaches include superconducting systems from IBM, Google, and D-Wave; neutral-atom systems from QuEra, Atom Computing, and Infleqtion; trapped-ion systems from IonQ and Quantinuum; and photonic systems from PsiQuantum and Xanadu. It remains uncertain which modalities will become dominant as the industry develops. Classiq’s platform is designed to support users working with any of these approaches.

Minerbi said this flexibility will matter to large customers that may ultimately select hardware other than spin-qubit systems.

“What we will give them from the Intel perspective is the assurance that no matter which modality it will be ... Intel will be ready.”

Intel also plans to promote its manufacturing capabilities for quantum chips. Ranade said spin qubits were selected partly because they can be manufactured using conventional semiconductor equipment. Intel builds its QPUs and quantum control chips with 18A logic technology at its facility in Oregon. The company has versions designed specifically for quantum processors, called 18A-Q, and for control chips, called 18A-C.

“We are open to being part of a quantum foundry for discrete components of this stack,” Ranade said. “At the same time, we have already built multiple quantum computing systems, entire systems, and we also aspire to become a quantum system provider, as in to build the whole quantum computer.”

A long-term investment

Ranade cautioned that the acquisition is a long-term investment rather than an immediate source of high-margin revenue. Intel expects potential synergies between Classiq’s software platform and its existing quantum hardware, but the company views quantum computing as an additional future-focused business alongside its mainstream operations.

“As a combined entity hardware-plus-software, we hope that there will be some synergies with Classiq’s quantum platform and our existing quantum hardware,” he said. “We hope it will be synergistic and attract even more customers. But this is not going to be a high-margin business from day one. This is really a bet on the future, and this is something we also have to do in addition to our mainstream businesses today.”