Intel Acquires Israeli Quantum Computing Firm Classiq for $2.2 Billion

Intel has acquired Israeli quantum computing company Classiq for $2.2 billion, a landmark deal marking the first acquisition of a quantum firm by a major tech company. The acquisition is expected to yield hundreds of millions of dollars for Classiq's key investors, including Entree Capital, Team8, and The Phoenix, as well as its three founders. Classiq will become Intel's strategic hub for quantum computing development, responsible for product and strategy across the entire field within the chip giant. This move significantly places Israel on the global quantum map.

Meanwhile, Israel is launching a new national quantum program, building on five years of investment totaling 1.25 billion shekels ($330 million) through the Israel Innovation Authority, MAFAT, and the Council for Higher Education. The Innovation Authority, coordinating the national program, has recommended a new government quantum initiative with a budget of 1.5 billion shekels ($400 million), pending approval by a future government. The program aims to boost software development, particularly for quantum error correction, a critical area for improving quantum computer efficiency.

Classiq's CEO and co-founder, Nir Minervi, revealed that the company had considered an IPO or SPAC merger before Intel's acquisition. He noted that the quantum stock market exhibits high volatility, similar to pharmaceuticals, due to its immense promise. Minervi also highlighted that government funding, though small, was strategically crucial for Classiq's growth, attracting significantly more private investment. He stated that Classiq, with its 140 employees, will continue to operate as a business unit within Intel, leading quantum computing efforts in software and hardware from Israel and reporting to Intel's CTO, Pushkar Ranade. Minervi expressed confidence in Intel's commitment to maintaining Classiq's operational independence and rapid pace, citing positive interactions with Intel's leadership, including CEO Lip-Bu Tan.

The article also mentions that the Israeli quantum industry has attracted over $1 billion in private funding and employs more than a thousand people. The national program's initial five years focused on academic labs developing qubits, but the new phase will emphasize software. A national quantum computing tender with 100 million shekels in government funding, matched by entrepreneurs, is expected soon. Additionally, nearly 1 billion shekels are earmarked by 2030 for industrial quantum computer acquisitions through the Prime Minister's Office's National AI Directorate.