IBM Stock Rises 4% as Company Unveils $10 Billion Quantum Computing Plan

TLDR

• IBM stock climbed 4% to $265.34 after disclosing a $10 billion investment in quantum research and manufacturing over five years.
• The company is targeting delivery of its first large-scale fault-tolerant quantum computer, called Starling, by 2029.
• IBM also announced Project Lightwell, a $5 billion open-source software initiative backed by more than 20 major financial institutions.
• The investment follows a letter of intent with the U.S. federal government to build a quantum chip foundry in Albany, New York, with $1 billion in proposed CHIPS Act funding.
• IBM has deployed more than 90 quantum systems to date and made its first quantum computer publicly available via the cloud in 2016.

IBM stock rose 4% to $265.34 on Thursday after the company filed plans with the Securities and Exchange Commission to invest more than $10 billion in quantum research and manufacturing over the next five years.

International Business Machines Corporation, IBM

The stock had already moved higher last week after IBM was named among a group of quantum developers set to receive funding under the 2022 Chips and Science Act. Thursday’s filing reignited that momentum.

The target machine is called Starling — part of IBM’s tradition of naming systems after birds. It is designed to execute 100 million quantum operations using 200 logical qubits.

IBM has deployed more than 90 quantum systems to date. The company made the first quantum computer available to the public over the cloud back in 2016 and has provided quantum-computing-as-a-service since then.

Quantum Foundry and Federal Funding

The $10 billion investment builds on a letter of intent between IBM and the U.S. federal government to establish a quantum chip foundry in Albany, New York. The project involves $1 billion in proposed CHIPS Act incentives from the federal government, matched by $1 billion in cash from IBM, along with contributions of IP, assets, and personnel.

The foundry will focus on manufacturing 300-millimeter quantum wafers.

Jay Gambetta, formerly IBM’s vice president of quantum, was promoted last year to lead the company’s entire research division. He described the foundry as less about funding and more about operational agility.

Project Lightwell: $5 Billion for Open-Source AI Security

Separately, IBM and its subsidiary Red Hat unveiled Project Lightwell on Thursday. It’s a $5 billion commitment to build a new clearinghouse for open-source software, supported by a new frontier AI model.

The project will involve more than 20,000 engineers focused on helping enterprises secure open-source software.

More than 90% of Fortune 500 companies rely on open-source software, making security a core concern as AI capabilities expand.

Major financial institutions have already signed on as partners, including Bank of America, BNY, Citi, Goldman Sachs, JPMorgan Chase, Mastercard, Morgan Stanley, Royal Bank of Canada, State Street, Visa, and Wells Fargo.

IBM completed its $34 billion acquisition of Red Hat in July 2019.

The Nasdaq Composite was flat on Thursday while IBM closed up 4%.

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