IonQ, other quantum start-ups, getting closer to bigger paydays

IonQ’s ion trap, key to its 32-qubit quantum computer. The company is hoping to sell “a number” of quantum computing systems over the next 18 months as commercial interest might be turning a corner.

Quantum computing start-ups have made all kinds of innovative technology breakthroughs in recent years, but what they may need most right now are commercial breakthroughs. At least one pure-play quantum start-up, IonQ, may have recently turned an important corner in that regard.

The firm, based in College Park, Maryland, said late last week that it posted $5.5 million in revenue in Q2, and is forecasting to collect at least $18.9 million in revenue for the full year of 2023. It also has banked more than $500 million, so even as it continues to invest in its trapped ion quantum computing technology and spend money to open a new facility in Bothell, Washington, it seems to have no urgent need for more funding.

Better yet, the company is hoping “to sell a number of [quantum computing] systems over the next 18 months in various configurations,” according to IonQ CEO Peter Chapman, who spoke on the company’s earnings call last week. That was music to the ears of stock analysts who have been questioning Chapman for months about when system sales might start to occur. As a result, IonQ’s stock price sat well above $15 per share this week, more than $5 above its IPO price in the fall of 2021, when it became the first of the pure-play quantum start-ups to have its shares trade on the public market (NYSE).

Chapman’s comment comes less than a month after IonQ cultivated a partnership with Quantum Basel, a quantum computing center in Switzerland, with a key component of the relationship being the sale of two quantum computing systems in a deal “worth $28 million to IonQ,” the company said at the time.

Chapman even said IonQ could be nearing a “ChatGPT moment.” ChatGPT, of course, is the OpenAI chatbot that made generative AI capabilities more accessible and led to an overnight explosion of market interest in generative AI technology for a variety of commercial use cases. What makes Chapman believe that could happen is that IonQ by the end of next year plans to have a quantum computing system capable of an Algorithmic Qubit rating of 64, which Chapman translated as the point at which IonQ’s systems should be able to handle some tasks and problems that classical computer can’t handle.

Among publicly-traded, pure-play quantum computing companies, not everyone is doing quite as well as IonQ, but others, such as Rigetti Computing, D-Wave Quantum, and Quantum Computing, appear to be nearing tipping points of their own in terms of being able to close more business and collect more revenue.

For example, Rigetti said on its own second quarter earnings call that it sold a quantum processing unit (not a full system sale) to an unidentified national lab for research purposes. D-Wave, a provider of quantum annealing systems for tackling optimization problems, also suggested that its revenue prospects are ramping up, with D-Wave CEO Alan Baratz stating that customers who last year were kicking the tires on its technology are now getting more serious.

“Over the course of the first half of this year, actually starting Q4 of last year, we really started to see customers focus on actually driving to get those proofs of concept engagements in place and built out, as opposed to just evaluating applications,” he said.

For the most part, this rising customer interest across the sector continues to come from research institutions, large labs, universities, and government clients. The next trick for quantum computing start-ups, and the one that could unlock much more revenue, will be to generate more interest in system purchases from corporate enterprise organizations.