Cambridge Quantum Computing (CQC), a seven year old start-up, is to merge with the quantum computing unit of $160 billion American conglomerate Honeywell in a move that is expected to create a “global powerhouse” in the nascent sector. Honeywell’s quantum computing business specialises in advanced hardware and develops quantum computers themselves. Cambridge Quantum develops the software the machines run.
The deal will see Honeywell separate out its quantum computers unit and merge it with Cambridge Quantum as well as contributing between $275 million and $300 million in cash to the venture. That will give the American company a 55% stake in the combined entity with the remaining 45% held by CQC’s shareholders, which include its founder Ilyas Khan and early backers.
Quantum computing is still in its early stages but holds the potential to exponentially increase the processing power and capabilities of classic binary computation. As quantum computers develop the expectation is that they will be able to compute data millions of times faster than even the most advanced of today’s supercomputers. That should lead to a massive leap forwards for artificial intelligence.
Many experts are convinced quantum computing and next-generation AI will lead to a new technological revolution across a wide range of fields including drug development, materials science, and chemical engineering. Quantum computing, like the quantum theory it is based on, seeks to understand and model the behaviour of matter and energy at the atomic and subatomic level.
CQC chief executive and founder Khan actually comes from a banking background rather than a scientific one. Before founding Cambridge Quantum in 2014 he worked as a merchant banker in Hong Kong for 20 years. The Lancashire-born entrepreneur even had a stint as chairman of football club Accrington Stanley, which he saved from bankruptcy in 2009.
He believes the new company that will result from the merger with Honeywell’s business could “address some of humanity’s greatest challenges, while driving the development of what will become a $1 trillion industry”.
Cambridge Quantum Computing is run by a staff of 60 scientists, 35 of whom hold doctorates in disciplines like quantum computing, maths, physics, chemistry, nanoscience and molecular electronics. That collection of fearsome intellects is working on tools to commercialise quantum computing. The business model will then be to sell those commercial services to companies and governments.
Khan will continue as chief executive of the newly combined company with Honeywell’s chief executive Darius Adamczyk assuming the role of chairman of the board. Mr Adamczyk told Honeywell’s investors that the deal will give them direct exposure to the quantum and cloud computing sectors and hinted at a future flotation for the new company, saying:
“Since first announcing Honeywell’s quantum business in 2018, investors have been clamouring for an opportunity to invest directly in Honeywell’s quantum business. The new company will provide them with an ideal avenue to do so.”
Honeywell, whose first quantum computer was revealed in 2019, was an existing investor in CQC having taken a stake as part of $45 million funding round by the start-up last December. That funding round valued the Cambridge-based company at $450 million. CQC has raised a total of $73 million in funding from investors including IBM, which is itself a leader in the quantum computing space.