Intel CEO touts quantum software buy as outlook disappoints

Intel ↘ 28.58% has signed a definitive agreement to buy Classiq, a Tel Aviv company that makes software for quantum computers. Intel says the deal will turn its Quantum Computing Group into a "full-stack quantum computing business". Intel did not disclose terms. Bloomberg reported the price at about $2.3 billion, citing people familiar with the matter (Reuters Thomson Reuters Corporation ↗ 1.63%). Ynetnews reported the payment would be in cash and stock, making it the largest quantum computing acquisition to date.businesswire.com+2

The deal pairs Intel's silicon spin-qubit hardware and chip manufacturing with Classiq's automated algorithm-synthesis platform. It would let Intel add quantum processing units to its lineup of CPUs, GPUs and custom chips. It needs regulatory approval and is expected to close in the first half of 2027.businesswire.com

Market reaction and earnings

Intel announced the deal after the market closed on Monday, October 26. The news lifted quantum stocks including IonQ ↘ 5.30%, Rigetti Computing ↘ 10.56% and D-Wave Quantum ↘ 7.87% on Tuesday. On Thursday, Dow Jones reported that CEO Lip-Bu Tan said Intel would become a full-stack, revenue-generating quantum computing company after the acquisition.markets.businessinsider.com+1

Those comments came alongside Intel's third-quarter results, which mentioned the Classiq deal. Intel shares fell sharply in after-hours trading because the company's fourth-quarter forecast was weaker than expected, which it blamed on a soft PC market (CNBC Comcast Corporation ↗ 4.27%).markets.ft.markitdigital.com+1

What Classiq brings

Nir Minerbi, Amir Naveh and Naveh's father Yehuda founded Classiq in 2020. Its software lets businesses design quantum applications that run on all major types of quantum hardware. Its customers include BMW Bayerische Motoren Werke AG, Wells Fargo ↘ 1.66% and Merck ↗ 2.18%. Intel said it will keep supporting Classiq's integrations with other companies' hardware. Tan invested in Classiq's 2022 and 2025 funding rounds.thenextweb.com+3

Israeli team at the center

Minerbi told Ynetnews that Classiq considered a SPAC merger or a traditional IPO before choosing to sell. He said Intel has only about 70 people working on quantum computing, and Classiq's roughly 140 employees will "lead Intel's quantum strategy" from Israel. He added that Intel's chief technology officer compared Classiq's future role to that of CUDA for Nvidia ↘ 4.22%.ynetnews.com

Minerbi admitted the timing of a commercial breakthrough is uncertain. "Both sides have something to prove, but the burden is greater on us," he said.ynetnews.com