Two weeks ago Intel announced it will acquire Classiq, an Israeli quantum computing software company, for about $2.3 billion in cash and stock, or about $2.2 billion net of the company's cash. According to reports, it is the largest acquisition yet in the global quantum industry. For a field most people still know mainly from popular science stories, that is a surprising sum. For Israel, it is proof that here too it has a front-row seat.
But what did Intel actually buy? Why are giants willing to pay billions for technology that does not yet solve real problems at commercial scale? And where exactly does Israel stand in this race? To answer, we need to start at the beginning.
What a quantum computer is, briefly
An ordinary computer, from your phone to the world's most powerful supercomputer, works with bits: units of information that are 0 or 1. A quantum computer works with qubits, units that exploit quantum physics and can be in a state combining 0 and 1 at once, and can be 'entangled' so that one's state is linked to another's. The precise explanation is complicated, but the bottom line is simple: for certain kinds of problems, a large and reliable quantum computer could compute things an ordinary computer could not in a thousand years.
The key word is 'reliable'. Qubits are extremely sensitive: small amounts of noise, heat or vibration make them lose information. So most of today's quantum computers are still experimental machines with limited qubits and high error rates. The field's big challenge is error correction: building systems in which many physical qubits work together to produce one 'logical' qubit you can trust. The big companies expect this within a few years, but nobody knows exactly when.
What Classiq does
This is where Classiq comes in. One problem in the field is that every hardware maker builds its computer differently. Some use superconducting circuits cooled near absolute zero; others use trapped ions, neutral atoms, photons or silicon qubits. Writing software for each is hard and expensive, a bit like writing in machine code.
Classiq built a platform for writing quantum algorithms at a high level, which it automatically translates into circuits that can run on different kinds of machines. It is similar to what modern programming languages did for ordinary computers: a programmer does not need to know how the processor is built to write software. According to Ynet, the company has raised more than $200 million and employs about 130 people.
Intel is developing quantum hardware based on silicon qubits, close to its ordinary chip manufacturing processes. Combined with Classiq, it should have a full stack from hardware to software. According to reports, Intel has committed that Classiq will keep supporting rivals' hardware. The deal is subject to regulatory approval and expected to close in the first half of 2027. Among the main beneficiaries, reports say, are Entrée Capital, with about 15%, and Team8, with about 8%.
Quantum Machines and the computer in Tel Aviv
Classiq is not Israel's only company in the field, and perhaps not the most prominent. Quantum Machines builds control systems for quantum computers: the hardware and software that drive qubits, send them pulses and measure the results. It is one of the critical parts of any quantum computer, and many labs and companies worldwide use its systems. In February 2025 Quantum Machines raised $170 million in a Series C, bringing its total to $280 million.
Quantum Machines also operates the Israeli Quantum Computing Center (IQCC) at Tel Aviv University, which opened in 2024. Set up with support from a national program of about NIS 100 million, it gives researchers and companies in Israel access to different types of quantum computers instead of waiting for cloud access from foreign firms. That infrastructure matters especially for young companies that cannot buy a quantum computer of their own.
The Innovation Authority is already looking ahead. It issued a call of about NIS 100 million for a second-generation quantum center, with an interesting requirement: it must integrate at least three different hardware architectures that compete with each other. The logic is clear: nobody yet knows which technology will win, so it is better not to bet on one horse. Submissions closed in October, and no winner has been announced.
The new wave
Around these two companies a whole ecosystem has grown. According to a Calcalist map, more than 20 quantum companies operate in Israel. Quantum Art, building a trapped-ion quantum computer, expanded its Series A to $140 million in April, bringing total funding to about $200 million. Q-Factor, building a neutral-atom machine, emerged from stealth with a $24 million seed round. And Nasdaq-listed Quantum X Labs last month brought on Prof. Daniel Freedman, a researcher with a background at Google, Microsoft and IBM, to connect AI and quantum technologies.
By Calcalist's count, five Israeli quantum companies raised nearly $500 million in 2025. That is still far from the sums flowing into AI or cyber, but for a field that barely existed as an industry in Israel a decade ago, it is a sharp jump. The question is whether the pace will last. Early data suggest 2026 was slower for fundraising, but the Classiq deal may change that: when investors see a $2.2 billion exit, they are ready to back the next company.
Why it matters to all of us
It is easy to think quantum computing is just for physicists. But there is one area where it already touches everyone online: encryption. Most of the encryption protecting bank accounts, messages and online transactions today rests on mathematical problems an ordinary computer cannot solve in reasonable time. A large, reliable quantum computer could solve some of them and break that encryption.
That has not happened, and probably will not tomorrow. But security experts warn of a scenario called 'harvest now, decrypt later': hostile actors collect encrypted data today, assuming they can decrypt it in future. So organizations and governments are starting to move to 'post-quantum' encryption designed to withstand quantum computers. The US standards body NIST published the first such standards in 2024, and the transition will take years. It is also an opportunity for Israeli cyber companies.
Beyond encryption, the areas where quantum computers are expected to help first are simulating molecules and materials, for example to develop drugs, batteries or fertilizers, and complex optimization problems such as route planning or portfolio management. This is where AI comes in too: some believe the combination of the two, with AI helping design and run quantum computers and quantum helping solve problems AI cannot, will be one of the hottest fields of the coming decade.
The big question
As in cyber, the question in quantum is whether Israel can build a large company that stays here, or whether the best companies will be sold to foreign giants as soon as they prove themselves. Intel has promised Classiq will keep operating, but the big decisions will now be made in the US. TheMarker has already asked whether Intel, whose earlier acquisitions did not always succeed, will realize the potential this time.
On the other hand, there are reasons for optimism. Israel has a strong academic base in physics, at the Weizmann Institute, the Technion, and Tel Aviv, Hebrew and Bar-Ilan universities. It has experience building deep-tech companies that combine hardware and software, and it now has proof that investors and acquirers will pay for quantum companies. If the state keeps investing in infrastructure, like the national center and the second-generation hub, the odds of building a real industry here improve.
The quantum computer that replaces the ordinary computer probably will not arrive soon, and may never replace it entirely. But the race to build it is already on, with real money, in the billions. This week, while Israel is busy with the US elections, chipmakers' results and software layoffs, it is worth remembering that in labs in Tel Aviv, Rehovot and Haifa, the next field in which Israel makes headlines may be taking shape.
