Intel’s $2.3 Billion Bet on a Quantum Future is a Decade in the Making

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Intel’s struggles for much of the past decade have been well documented here and in other news sites, industry analyst reports, and financial research papers. The once-dominant chip maker has been tripped up by any number of challenges, from the growing strength of AMD cutting into its server chip market share and Nvidia GPUs riding the AI wave, to billions in operating losses sustained by its foundry business. Intel lost $11 billion in its FY 2026 second quarter, and the company is due to release is latest quarterly numbers on October 29.
Lip-Bu Tan, Intel CEO, is mid-turnaround, cutting costs and scaling back earlier expansion plans. The chipmaker is also benefiting from the shift from AI training to inference, a more CPU-intensive workload that could narrow the gap between CPUs and GPUs in the fast-growing AI market.
Even so, innovation at Intel hasn't stalled. This week, the company signalled that quantum computing will be an important part its future, and executives are now ready to make a big bet on the rapidly evolving technology.
Intel announced plans to acquire six-year-old Israeli company Classiq for $2.3 billion. The quantum software maker's platform helps developers build quantum algorithms and applications faster and at scale using tools like AI natural language models and a Python-like language. The deal is expected to close in the second half of next year.
As development of quantum computers accelerates, the focus of a growing numbers of companies like Classiq is expanding beyond hardware and qubits to software, algorithms, architectures, digital twins, and networking.
Intel has spent the past decade quietly building out its quantum portfolio, which ranges from chips like its Tunnel Falls QPU, a 12-qubit silicon chip built with the spin-qubit modality, to its Quantum SDK and Horse Ridge control chips developed in 2019. The company also can manufacture its quantum chips using the same 18A-based process technology that it uses for its mainline CPUs.
Classiq should allow Intel to become a full-stack quantum company that can compete with the likes of IBM and Google in a market tipped to grow to up to $20 billion in the next few years.
Classiq will turn what has been a lab project for Intel into a full commercial business, according to Intel chief technology officer Pushkar Ranade.
"This effort on quantum computing is really a preparing Intel for the future, for the next wave of computing,” Ranade told journalists during a call. “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 co-founder and chief executive officer, said during the same call that the company – which Tan reportedly invested in four years ago – saw an opportunity to fill a void in the quantum computing market, as hardware development and efforts to address challenges like error correction were evolving.
"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 the software platform hardware-agnostic, Classiq had to embrace technologies that had been used to help scale classical computing, including EDA technologies, modeling, synthesis, and compilation. All of this important not only for Intel but also for the wider quantum computing field, he said.
"Any computing revolution so far was led by strong hardware, capable hardware, and software that unlocked its value,” Minerbi said. “In quantum, Intel has so many hardware assets: Its own QPU [quantum processing unit], silicon-based – which is the most promising modality — but also control electronics and foundry services and simulation stack and the quantum SDK and so on. When you accompany it with the software that engages with end users, it's a big move. Intel is in a great position not just to serve the end users, the enterprises, the governments, the universities and so on, but also to engage them with the rest of the quantum ecosystem, with quantum clouds and HPCs and datacenters and other hardware providers."
Classiq has more than four dozen enterprise customers, some of them major companies including communications giants Comcast and AT&T, car manufacturers BMW and Rolls-Royce, research centers like Oak Ridge National Laboratory, and global IT firms like NTT Data and Mphasis. Once the deal closes, they’ll be customers of Intel, which Ranade admitted hadn’t "really done much by way of customer engagement or trying to commercialize our technology."
Minerbi claimed Classiq has generated "very healthy revenue this year" and looked forward to "very healthy revenue CAGR over the coming years." Classiq has raised some $200 million over multiple investment rounds over its six years, with valuation estimates ranging from $400 million to $600 million last year.
Classiq, which has about 130 employees, also brings much needed modality neutrality to Intel, which has pinned its hardware business on spin-qubits, where particles like electrons act like magnets that possess a property called "spin", which can give the particle a computational 0 or 1, or keep them in the quantum superposition of both. Scientists can control and entangle the spins using microwave pulses, magnetic fields, or electrical tuning to run quantum operations.
But there are a host of modalities in use, including superconducting by the likes of IBM, Google, and D-Wave, neutral atoms by QuEra, Atom Computing, Infleqtion, and others, such as trapped ions (IonQ and Quantinuum), and photonics (PsiQuantum and Xanadu). It’s unclear which modalities – as the quantum computing field matures – will come to the forefront. A key feature of Classiq’s platform is that it can accommodate users of any modality.
This will be important for the large customers – which also includes Lufthansa and Wells Fargo – that may use quantum technology that isn’t spin-qubit, Minerbi said. "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 will aggressively pitch its foundry capabilities for building quantum chips, Ranade said. He said the key reason for opting for spin-qubit as Intel’s modality was because "it lends itself very easily to manufacturing on conventional semiconductor equipment." Intel builds its QPUs and control electronic chips based on 18A logic technology at its fab in Oregon. There are versions of the technology specifically for the quantum chip – 18A-Q – and control chip (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."
Despite the enthusiasm of both companies for this deal, he cautioned that quantum is a long-term play.
"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 a 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." ®

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