IBM Spins Off the First Pure-Play Quantum Chip Foundry

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rrbanffy 3 days ago 73 commentsRead Article on futurumgroup.com

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mathattack•3 days ago

Interesting. My observation on IBM is their entire business model is:

1 - Audit your customers

2 - Buy back shares

3 - Force early retirements

It was easy to see why Watson failed in that environment. The revenue was “We’ll let you out of the $6mm audit bill if you buy $2mm of Watson”. Companies would agree, install better asset management, and never put Watson into production.

I couldn’t imagine Quantum Comouting surviving there. Spinning it off the best play.

rr808•3 days ago

Their business model is more like make a lot of noise about high tech, then hire h1bs to do routine IT work their corporate customers do.

coredog64•3 days ago

That's Kyndryl: They spun it off into it's own entity after "IBM Global Services" had such a (deservedly) poor reputation that they were scraping the bottom of the barrel for clients and employees. Not that Kyndryl is any better, but it's enough of a rebrand that you might fool decision makers for the few minutes that it takes to get them to buy in.

sublinear•3 days ago

Their corporate customers also do that to their own customers.

pjmlp•2 days ago

Also buy Red-Hat and in the process own quite a few FOSS projects.

pjmlp•2 days ago

A business model that currently the Linux ecosystem benefits from, between Linux kernel, GCC, Wayland, GNOME, systemd, Java, Go, Rust.

fsckboy•1 day ago

they've just spun off the first quantum computer pure-play, the highest of techs, the greenest of green-fields, and your observation is "IBM doesn't do this"

postalcoder•3 days ago

Seems like tacit acknowledgment that IBM mothership is not the right place for a speculative growth play from both a management and capital perspective.

I’m not IBMologist but I do remember how IBM pushed Watson when it was clear that upper management had no idea what Watson actually was. Regardless of the viability of the underlying technology, it’s best to keep such things away from the consultants.

Also, article is very difficult to read. Bad typeface, spacing, coherence and prose. I found the press release less strained.

https://newsroom.ibm.com/ibm-and-u-s-department-of-commerce-...

Traubenfuchs•3 days ago

I remember when watson was touted as soon to be replacement for doctors more than 10 years ago…

https://www.henricodolfing.ch/en/case-study-20-the-4-billion...

hibikir•3 days ago

It's not that the cheating stayed with IBM: Ray Dalio hired David Ferrucci out of Watson to try to make an AI for Bridgewater. The pitch was to make it a very accurate people assesor, but in practice the goal was to tell you who agreed the most with Ray Dalio. The team spent years of their lives taking Bridgewater's money, building basically linear regression on questionnaires, and calling it advanced AI on interviews. It's all documented in The Fund.

MichaelZuo•3 days ago

I don’t understand why IBM never tried to make amends and reclaim their former credibility somehow.

Do IBM decison makers intentionally want to have that hang over the whole firm and be the butt of jokes?

trollbridge•3 days ago

It’s impressive to have the first major AI platform and then completely bungle it.

RaftPeople•3 days ago

> Seems like tacit acknowledgment that IBM mothership is not the right place for a speculative growth play from both a management and capital perspective.

I'm not understanding your logic, can you explain?

What I see with the program and amounts companies were awarded is some level of acknowledgment of the current state of quantum research (i.e. IBM is generally considered the leader) and their pragmatic approach that piggy-backs on current technologies (for obvious speed+cost benefits).

hiddencost•3 days ago

> IBM is generally considered the leader

You must not talk to competent people. IBM is very experienced at this grift. I remember when I used to go to conferences in a different field and IBM would announce "state of the art" results that were very obviously done by cheating (making an ensemble model and tuning the weights on the test set). Everyone doing real work would ignore them, and then they'd go sell to clueless midcap companies on the basis of that announcement.

esseph•3 days ago

They are either the #1 or #2 quantum company in the world next to Google and Quantinuum.

They also keep getting pumped full of DoD money for quantum foundries and modular systems research.

pjmlp•2 days ago

> I’m not IBMologist but I do remember how IBM pushed Watson when it was clear that upper management had no idea what Watson actually was. Regardless of the viability of the underlying technology.

So pretty much like any other AI company in 2026 hunting for VC money?

horns4lyfe•3 days ago

Well ya, it’s an Indian IT sweatshop at this point.

senthil_rajasek•3 days ago

I now work in an I.T dept of a financial company in U.S and I've also worked at software companies in India.

They are all sweatshops these days.

winfredJa•3 days ago

financial companies have always been sweatshops but it wasnt the case for IBM before dot com.

roncesvalles•2 days ago

It seems more like they're positioning for the quantum spinoff to achieve meme stock status.

DANmode•2 days ago

A speculative growth play,

or an innovation play?

Keep IBM people & policies away from either, to succeed.

caminante•3 days ago

This is a pro-IBM piece.

I'm surprised it has zero mention of potential advantages of trapped ion despite being superior on stability windows, accuracy, and operating temps.

I also appreciate the disclosure about AI generated content, but this article gets too repetitive.

andrewstuart•3 days ago

IBM is such a weird company what even IS IBM these days?

For the most part it seems to be rent-a-programmer “consulting”.

But then articles like this come up where they seem to still have research capability.

They bailed out of pc hardware long ago, do they still do mainframes - maybe mainframes don’t exist any more?

AlotOfReading•3 days ago

IBM still sells extremely POWERful systems, but they don't seem particularly interested in expanding the market.

I once had a conversation with a director of that division about why it wasn't on the market. It basically came down to the existing customers being willing to pay such exorbitant amounts for each system after all the support contracts that "normal" markups like Nvidia and Intel enjoy were too paltry in comparison.

throwawaypath•3 days ago

They also charge you for every instruction cycle on the machines (look up MIPS licensing) you own. Imagine if NVIDIA started doing that with their GPUs: spend $2500 on a GPU and then pay NVIDIA a royalty fee for every hour of workload you put on it.

kev009•3 days ago

Two different product lines. POWER systems are sold by the socket, on the higher end sometimes you get some license disabled cores but it's usually trivial. Mainframes are the opposite, you usually get the full monty machine that is extremely limited by licensing.

alienbaby•3 days ago

they've also still got their storage stuff. I always wondered why that isn't doing better, it seemed pretty damn good when I've ended up working iwth it.

izanton•3 days ago

I don't really understand how quantum chips work, but it's so interesting and cool (or it's not)

ktallett•3 days ago

It massively depends on what type of quantum chip it is, so often the confusion is that there is no one specific method. Especially as we are too early in the development cycle to have a clear winner (although Photonic computing is gaining traction).

izanton•3 days ago

I try to follow the motto of my university quantum physics professor: if you feel like quantum mechanics is making you more certain you understand it, you’re probably wrong and need to start over.

But as I understand it, the most "basic" approach now with qubit-based computers is to select the most popular answer across many runs and treat it as the "right" one.

amelius•3 days ago

First? Europeans are already producing quantum processors at research scale, soon industrial scale.

https://quantware.com/news/quantware-raises-178-million

coredog64•3 days ago

Finally, I can factor 21 at an industrial scale!

madanparas•3 days ago

The real story isn't the $2B. It's that the foundry is standalone, so other quantum hardware companies can use it. Shared infrastructure beats nine separate research cleanrooms.

Zigurd•3 days ago

Is there enough agreement regarding what is a quantum chip, and what process technology is necessary to make one?

rbanffy•3 days ago

I guess it's a balance. If you think their process makes workable chips for your designs, then you can use it. If you can't adapt your design to what they can build, then you need to build your own foundry. Chances are a reliable supplier will push the market in the direction of their process.

If we had someone making GaAs processors in the 1980s for a price competitive with their silicon counterparts and with a long-term roadmap, we'd have very different computers now. And some extra toxic waste problems.

ghaff•3 days ago

I've been out of the space for a bit. IBM has been betting on the engineered superconducting approach, which makes sense given their background, but there are other options, often for potentially different problem areas. Need to dive back in.

ktallett•3 days ago

The superconducting approach is great in principle but has so many issues that need to be solved, from cooling, to energy to cool, to max number of qubits before you can't cool to operating temperature, before optimal connectivity to rest of system and so on. I am of the view photonics is the way forward but as you say, it will depend on the task at hand partially.

imglorp•3 days ago

Is there any agreement regarding real applications that warrant fab volume or is this still speculation?

bawolff•3 days ago

There is high agreement on what the real applications of Quantum computing are. Unfortunately these projects are basically useless when it comes to them.

gaze•2 days ago

For superconducting qubits, yes. For other architectures everyone is doing their own thing.

alsetmusic•2 days ago

US's big bet on quantum computing may not be entirely legal[0]

0. https://arstechnica.com/tech-policy/2026/05/uss-big-bet-on-q...

bluesounddirect•2 days ago

I would like to believe this is a cover story for IBM to make parts for the DoD latest weapon . I would like to imagine its a cover to make parts for some new government super computer. But its IBM its probably nothing even close to that . Its more likely a nice way to get the stock back at $315 and make nothing.

dvh•3 days ago

Can the chips they plan to make there run Shor?

upofadown•3 days ago

From the article:

>IBM is developing four custom ASICs — a decoder, a two-qubit gate controller, a single-qubit controller, and an amplifier — designed to handle quantum control at scale, with these circuits expected to converge around 2029 at the point where power consumption becomes manageable at up to 3 megawatts per system.

The current hotness seems to be based on creating pairs of entangled qubits based on what might be realistically achieved with error correction. Shor's requires thousands of entangled qubits (something like 4000 for 2K RSA and 1500 for 256 bit elliptic curves).

So unless someone comes up with a way to break cryptography using pairs of entangled qubits then this probably isn't relevant.

bawolff•3 days ago

If they could in any meaningful way, i'm pretty sure the press release would have lead with that.

stogot•3 days ago

The article talks about IBM spreading bets to other techniques. Reminds me to ponder again. Has Microsoft retracted their sketchy quantum claims about inventing new states of matter in the past year? https://www.theregister.com/on-prem/2025/03/12/microsofts-qu...

archonis•2 days ago

I wonder how many people IBM will layoff to celebrate this one.

Scubabear68•3 days ago

I am not surprised, but disappointed, to see something like the CHIPS Act be used for something which is still in ultra-super-unbelievably-early-research-phase. Put more candidly, something not currently useful like Quantum computing.

Looks like just a handout to IBM.

osnium123•2 days ago

The administration fired the original CHIPs Act team and so the new team might not be up to speed.

DeathArrow•3 days ago

Two questions:

-do the chips help with inference?

-can you run Doom on the chips?

rbanffy•3 days ago

Being for quantum computing, the answer is both yes and no. You need to collapse the wave function to pick one.

_s_a_m_•3 days ago

IBM does not disappoint with their yearly meme posts about AI and Quantum and what not

DivingForGold•3 days ago

Bet this got Elon Musk's attention, his dreams about his TerraFab.

ArchieScrivener•3 days ago

A bailout for a company that stopped innovating and instead has been inventing new ways to create middle management and bureaucracy.

So much for capitalism.