After spending decades on quantum annealing, D-Wave hopes to make a splash in the gate computing space.
Based in Canada D-Wave Quantum announced yesterday that it had reached an agreement to buy a US quantum computing firm. Quantum Circuits for 550 million US dollars.
This $550 million price consists of $300 million in D-Wave common stock and $250 million in cash. The deal, expected to close later this month, aims to combine Quantum Circuits' gate model quantum computing technology with D-Wave's quantum annealing expertise.
“Together with Quantum Circuits, we expect D-Wave to outpace the industry.”
Alan Baratz, D-Wave
D-Wave has long specialized in quantum annealing computers, which rely on the principles of quantum physics to solve optimization problems more efficiently than classical computers. This approach differs from the gateway-based quantum computing that many of D-Wave's competitors are building, from tech giants like Microsoft and IBM to Canadian startups like Xanadu and Photonic. Gate model quantum computing, which has broader applications, stores data in qubits instead of traditional computer bits to perform powerful calculations.
D-Wave says the acquisition of Quantum Circuits will “significantly accelerate the planned time to build a scalable, error-correcting gate-model quantum computer that will complement and complement it.” [existing] commercial quantum annealing systems” and help it become the first company to provide “fully error-corrected, scaled gate-model quantum computing.”
D-Wave CEO Alan Baratz said in a statement that the deal is a “key milestone” that will help ensure the company's “long-term value proposition.”
As part of this merger, D-Wave intends to create a new research and development center in New Haven, Connecticut, where Quantum is headquartered.
CONNECTED: D-Wave sells US$400 million worth of shares to fund acquisitions and working capital
Founded in 1999, D-Wave is affiliated with the University of British Columbia. excited its headquarters will move from Burnaby, British Columbia to Palo Alto, California in 2023, but will maintain a presence in both cities. The company is traded on the New York Stock Exchange.
Quantum Circuits, a privately held company, was founded out of Yale University in 2015 by a team that includes superconductor pioneer and professor Ron Schoelkopf.
D-Wave said a similar deal could be struck last summer when it was sold. US$400 million into common stock to finance potential acquisitions and operating expenses. In November of that year, during the company's third-quarter earnings call, Baratz indicated developing a gate model was a priority for D-Wave going forward.
Interest in quantum computing, which could have potentially important defense applications, has recently been growing in North America, thanks in part to increased attention to sovereignty against the backdrop of military and economic threats from the United States.
CONNECTED: Photonic says it's ready to commercialize quantum technology with $180 million fundraising
Earlier this week, Coquitlam, British Columbia-based Photonic announced 180 million Canadian dollars fundraising. In an interview with BetaKit, then Photonic CEO Paul Terry predicted consolidation in the quantum computing market following a series of industry breakthroughs in 2025. The D-Wave deal could be a sign of more to come on this front.
Photonic's funding follows a decision by the Canadian government. December launch a new quantum research program that can compete with its rival US DARPA Initiativeand Xanadu share plans make public in a $3.6 billion SPAC deal last November.
Toronto-based Photonic, Xanadu, and Sherbrooke-based Nord Quantique are involved in both the Canadian and U.S. quantum research programs, while Montreal-based Anyon Systems is only involved in the Canadian initiative and D-Wave and Quantum Circuits are not involved in either.
Image courtesy of D-Wave.
