IBM sees a big milestone ahead for quantum computing - and it hinges on these new chips

By Britney Nguyen

IBM announced new processors that it said will help it build a 'fault-tolerant quantum computer' by the end of the decade

IBM's quantum lab in Albany, N.Y,.

International Business Machines unveiled its plan to build "the world's first large-scale, fault-tolerant quantum computer" in June, and on Wednesday, the company shared more on how it plans to reach that goal by the end of the decade.

The company (IBM) announced an "experimental processor" called Loon, which it said is its first to demonstrate "all the key processor components needed for fault-tolerant quantum computing," or the point when quantum computers can reliably carry out accurate calculations despite errors in their environment.

The chip validates an architecture that can lead to "practical, high-efficiency quantum error correction," IBM said.

Classical computing is built around simple math, director of IBM research Jay Gambetta told MarketWatch, explaining that central processing units are good at adding numbers very fast, and graphics processing units can do those calculations in parallel.

Quantum chips, however, do a different type of math, he said.

"There's many examples, whether it's in chemistry, whether it's in materials, whether it's in differential equations" that classical computers "just cannot do," Gambetta said. "This new math can simulate them, because it computes the same way nature does."

IBM has set a goal to build a fault-tolerant quantum computer by 2029. Gambetta said that type of computer would be able to solve the new branch of math on a large enough scale that it becomes practical.

"It requires demonstrating an error-correcting code that we call the LDPC code," or low-density parity-check code, which "requires inventing complicated packaging technology."

Gambetta said IBM has been able to do this with its Loon quantum processor.

Additionally, IBM said it has shown it can use classical computing hardware to decode errors in real-time.

Read: IBM's stock has its best day since January, and quantum is a big reason why

The tech giant also announced its next quantum processor, Nighthawk, which it said is its "most advanced" yet, and keeps the company on the path to deliver quantum advantage by next year. That refers to the point when quantum computers can perform simulations that classical computers cannot currently handle.

In Gambetta's view, which is shared by some of IBM's quantum peers and competitors, the industry will reach quantum advantage next year.

Nighthawk, which follows IBM's Heron processor, is slated to be available to IBM users by the end of this year, the company said. The chip includes 120 qubits, which are the units of information used by quantum computers, with 218 tunable couplers, or the components that link the qubits to enable their interactions.

The improved connectivity between qubits "will allow users to accurately execute circuits with 30 percent more complexity than on IBM's previous processor while maintaining low error rates," the company said. Quantum circuits refer to the sequence of quantum gates that work on qubits to carry out calculations.

Nighthawk's architecture will allow its users to run "more computationally demanding problems" that need up to 5,000 two-qubit gates, IBM said. Two-qubit gates are operations that happen on two qubits at the same time to enable entanglement, which is when two particles share a single quantum state. Entanglement is "critical for quantum computation," IBM said, and can be used for discovering the inner workings of molecules.

For the quantum industry to have commercial value, Gambetta told MarketWatch that it needs applications, which means getting to quantum advantage.

IBM announced an open and community-led tracker on Wednesday for its quantum peers and partners to monitor and verify progress toward advantage.

"Last year we de-risked the blueprint - we told you how we're going to do the theory. Now we've actually shown with Loon that we can build the technology," Gambetta said.

See more: IBM's stock just set a new all-time high. This was the latest spark.

Next comes the scaling, which Gambetta said is a "significant step" toward making its fault-tolerant quantum computing trajectory happen.

In October, Evercore ISI's Amit Daryanani said in a note that IBM sees a multi-billion dollar revenue potential for its quantum business in the long term, given that its technology can potentially drive about $500 billion in value.

When quantum technology is eventually commercialized, Daryanani said IBM sees itself taking a large share of the quantum market compared to competitors given its leadership in hardware, software, consulting and its customer ecosystem.

Daryanani also noted that capital intensity for the quantum buildout "will be much lower" than what hyperscalers are currently spending on AI infrastructure.

-Britney Nguyen

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11-12-25 0604ET