Intel Drives Quantum Strategy Forward with 2.3 Billion Dollar Classiq Acquisition
Intel is betting on quantum computing through the 2.3 billion dollar acquisition of Israeli startup Classiq under new leadership. The strategic move aims to revitalize the tech giant's market position, mirroring past landmark industry acquisitions.
Intel has historically earned a reputation as a poor acquirer, missing major technological shifts—from mobile and autonomous driving to artificial intelligence—which pushed the company to the brink of abyss. With deep ties to Israel, Intel invested billions of dollars in acquisitions that failed to deliver sustainable value. Its largest deal was the 15 billion dollar acquisition of Mobileye a decade ago, followed by the one billion dollar purchase of Moovit and Mobileye's subsequent acquisition of Amnon Shashua's robotics startup Mentee for one billion dollars. Despite these heavy investments, Mobileye currently trades at a valuation of 5.5 billion dollars.
Another major transaction was the 2019 acquisition of Habana Labs from Avigdor Willenz for two billion dollars. Had Intel effectively leveraged Habana Labs, the company could have competed against smaller AI chipmakers, but operations were practically halted. A similar fate befell Granulate, a promising startup acquired in 2022 for 500 million dollars. However, a profound shift has taken place under the leadership of Lip-Bu Tan. Intel's valuation has more than doubled, trading near 500 billion dollars, supported by early signs of a strategic turnaround.
The new leadership has demonstrated an appetite for bold moves, exemplified by the 2.3 billion dollar acquisition of quantum computing startup Classiq. Intel aims to build its new quantum division around Classiq, reminiscent of its previously attempted 5.5 billion dollar acquisition of Israel's Tower Semiconductor, which ultimately collapsed due to Chinese regulatory hurdles. While Intel entered the quantum race relatively late, acquiring Classiq can accelerate its market positioning. The Israeli startup holds a unique global standing, capable of operating across diverse quantum architectures including trapped ions and neutral atoms.
As the race for quantum computing supremacy continues, buyers require sophisticated operating systems provided either by Classiq or IBM. Remaining independent would have required Classiq massive financial resources to sustain its competitive edge against IBM. If Intel executes its strategy correctly and the quantum market finally breaks through, Classiq could replicate for Intel what Google achieved with the 2005 acquisition of Android for 50 million dollars.
