South Korea’s largest telecom company SK Telecom Co. will acquire about a 3% stake in IonQ Inc., the world’s first publicly traded quantum computing company on the New York Stock Exchange, in hopes of taking a quantum leap in its artificial intelligence push.
The Korean telco giant announced on Thursday that it has agreed to swap its entire stake in Geneva, Switzerland-based ID Quantique (IDQ) jointly held with its investment arm SK Square Co. with IonQ common shares.
Industry sources said the Korean telco will hand over its entire 56.9% stake in IDQ to IonQ to acquire about 3.1% worth of the latter’s stake. The total transaction value is estimated at 330 billion won ($228.4 million).
The stock swap deal is expected to be closed in the next nine months, said IonQ, adding that the deal closing will allow IonQ to acquire a controlling stake in IDQ, a global leader in quantum-safe networking and sensing technology.
Through the deal, IonQ and SK Telecom will also work together on quantum computing and network technologies under a strategic partnership, both companies said.
SK Telecom expects its partnership with IonQ will lay the ground for its leap in the quantum-based AI era set to come later by creating synergy between AI and quantum technologies.
QUANTUM LEADER
IonQ is a global leader in quantum computing technology, which is considered a game-changer in advanced tech industries, especially AI.
Quantum computing promises to deliver significant advancements by tackling complex problems that current technologies cannot solve, offering transformative applications across various sectors, including defense, finance, and energy.
IonQ was founded in 2015 by Kim Jungsang, a professor in the Department of Electrical and Computer Engineering at Duke University, and Chris Monroe, a physics professor at the University of Maryland.
It became the world’s first publicly traded quantum computing firm on the NYSE in October 2021, and its market cap is $6.22 billion as of Thursday.
It garnered funding from world-leading companies and venture firms, including Samsung Electronics Co., Amazon Web Services, Google Ventures, Lockheed Martin and Airbus Ventures.
Korean automotive behemoth Hyundai Motor Group also invested 7.1 billion won in IonQ and forged a partnership in 2021.
But it is the first time for a Korean telecom company to form a strategic partnership with a leading global quantum computing company alongside a stake acquisition.
USE QUANTUM TECHNOLOGY TO CATCH UP TO AI LEADERS
The Korean telecom giant is a latecomer on the AI bandwagon but jumped into a quantum technology race earlier than its cross-town rivals.
In 2011, SK Telecom set up its quantum research and development center called Quantum Tech Lab.
It acquired IDQ, then the world’s No. 1 quantum-safe crypto solution developer, in 2018 and placed it under its own quantum R&D center.
IDQ develops products across quantum networking and quantum-safe communication, including quantum key distribution, quantum random generators and quantum detection systems.
Founded in 2001, it launched the world’s first quantum random number generator in 2002 and the world’s first quantum key distribution service in 2006.
Its quantum networking technology is considered essential in building fundamental infrastructure in the quantum computing industry.
Through collaboration with IDQ, SK Telecom has deployed the largest quantum network across South Korea.
SK Telecom will continue working with IDQ to develop various products and services in quantum-safe communications.
With IDQ, IonQ also hopes to pioneer in next-generation secure communications on high expectations for the growth of the related market, the quantum computing firm said in a press release on Wednesday.
According to McKinsey, the quantum networking market is forecast to grow to between $10-15 billion by 2035.
“Quantum technology is not an option but an essential element for the advancement of AI,” said Ryu Young-sang, chief executive officer of SK Telecom.
“SKT will continue to make proactive investments and collaborations to become a leading company in the AI field.”
SK Telecom plans to apply IonQ’s quantum computing technology to its AI solutions, such as its personal AI agent A., or Adot, as well as AI data centers and edge AI technology, by combining them with its own quantum crypto technologies, such as quantum key distribution and post quantum cryptography.
By Ji-Eun Jeong
jeong@hankyung.com
Sookyung Seo edited this article.
