Insider letter

• IonQ has entered into an agreement to acquire most of Qubitekk's assets and integrate the quantum networking company's team to strengthen IonQ's position in the quantum networking space. The deal is expected to be completed within six months.
• Qubitekk brings expertise in highly secure quantum networks, including the US's first commercial quantum network, EPB Quantum Network, and adds 118 patents to IonQ's portfolio, expanding its capabilities in quantum network hardware and security.
• IonQ views quantum networks as key to scaling its quantum systems and expects the acquisition to improve revenue opportunities following recent major contracts including a $54.5 million award from the U.S. Air Force for the development of Quantum network technology.

PRESS RELEASE – IonQ (NYSE: IONQ) announced that it has entered into a definitive agreement to acquire substantially all of the operating assets of Qubitekk, Inc., a leading quantum networking company based in Vista, California. As part of the transaction, the Qubitekk team will join IonQ to further expand IonQ's leading position in the quantum networking industry. IonQ expects to complete the acquisition within the next six months, subject to the satisfaction of certain closing conditions.

Quantum networks are expected to become essential infrastructure and enable critical applications, particularly in defense, finance and energy. The technology enables multiple nodes to communicate via entangled qubits, providing highly secure communications, precise time synchronization, a foundation for distributed quantum computing, and a transport layer for quantum sensing. Qubitekk designed and implemented the country's first commercially available quantum network in Chattanooga, Tennessee, the EPB Quantum Network. Qubitekk has particular knowledge in the category of quantum networks.

From the beginning, IonQ has prioritized quantum networking as a key strategy for scaling its quantum computers. Specifically, IonQ's architecture involves the use of photonic connections to connect multiple quantum computers together, creating a more powerful cluster. The years IonQ has dedicated to developing this technology for its computing efforts have allowed IonQ to rapidly advance its offerings in the quantum networking industry.

Once completed, the Qubitekk acquisition will represent a significant expansion of IonQ's quantum networking capabilities and customer base. IonQ expects the transaction to contribute to near-term bookings and revenue opportunities and expand IonQ's commercial leadership position in quantum networks.

“Our acquisition of Qubitekk will represent a significant step in IonQ's expansion into the quantum networking market, where IonQ will be a clear leader in both quantum networking and quantum computing,” said Peter Chapman, President and CEO of IonQ. “The combination of Qubitekk and IonQ will allow us to continue our momentum in quantum networking. Quantum networks and quantum computing are extremely synergistic for IonQ. I expect IonQ’s quantum networking business could be the first business unit to become cash flow positive.”

Qubitekk's leadership team and employee base, including physicists, engineers, software developers and others, will join IonQ to further advance quantum networking efforts. The Qubitekk team joining IonQ includes co-founder and CEO Stan Ellis, co-founder and CTO Dr. Duncan Earl, Chief Revenue Officer Corey McClelland and President Keith Clark.

The agreement will also significantly expand IonQ's expertise and technology portfolio in quantum networking, with 118 U.S. and international patents in the areas of quantum network hardware and quantum network security and protection.

“Qubitekk is excited to join IonQ to capitalize on our early advantage in quantum networking,” said Stan Ellis, co-founder and CEO of Qubitekk. “We admired IonQ as a pioneering quantum company with powerful computing systems and a proven commitment to quantum networks as critical infrastructure. By uniting Qubitekk with IonQ, we can pursue the quantum-based Internet as a near-term reality.”

IonQ's acquisition of Qubitekk comes hot on the heels of a series of recent quantum network announcements from IonQ. In September, IonQ announced the largest known 2024 U.S. quantum contract of $54.5 million with the United States Air Force Research Lab (AFRL) for the design, development and deployment of quantum networking technology. Recently, IonQ demonstrated that remote ion-ion entanglement is a key milestone for scaling its computing power to multiple quantum processors using photonic interconnects. Earlier this year, IonQ announced that it had been selected by the Applied Research Laboratory for Intelligence and Security (ARLIS) for a quantum network contract to develop a first-of-its-kind, networked system for blind quantum computing. Blind quantum computing allows quantum computers to operate while remaining “blind” to the information being processed by them.