Quantum computer maker IonQ to buy cybersecurity startup Elisity for $1.3B

IonQ Inc., a publicly traded supplier of quantum computers, today announced plans to acquire Elisity Inc. for $1.3 billion.

The price tag includes $150 million in performance incentives that are contingent on Elisity meeting certain business milestones. The all-stock deal is set to close by year’s end. 

IonQ’s flagship product is a 256-qubit quantum computer called Superion 256 that debuted last month. Its qubits are ions, or charged particles, suspended in a vacuum. The system encodes data into the ions and reads out processing results using a control device made with standard chipmaking equipment. IonQ says the device is more practical than the highly complicated, bulky lasers typically used for those tasks.

The company also competes in the cybersecurity market. Last year, it bought a Swiss startup called ID Quantique that developed a series of physical data encryption devices. They use quantum mechanical phenomena to protect customer data. Today’s acquisition will extend IonQ’s cybersecurity portfolio to additional use cases.

Elisity offers a software platform that can automatically map out the devices in a corporate network. It spots employee workstations, servers and more specialized endpoints such as factory sensors. Elisity then collects technical data about each device. The platform can, for example, identify a system’s manufacturer and the users who access it.

The company uses the information that it gathers to identify cybersecurity gaps. In particular, it spots devices that have overly broad access permissions. Elisity could, for example, identify a production line computer that can be accessed from outside the factory where it’s installed.

The platform automatically generates new, safer access policies for vulnerable devices. A built-in simulation tool enables administrators to test those policies for bugs before rolling them out to production. If a device’s access requirements change over time, the software can adjust its security permissions.

IonQ plans to extend Elisity’s vulnerability detection features after the acquisition closes. In particular, it will add capabilities designed to spot and fix “quantum-related security risks.” Those risks mainly affect the encryption algorithms that organizations use to protect their data. It’s believed that a hypothetical large-scale quantum computer would be capable of bypassing those algorithms.

Researchers have developed post-quantum cryptography, or PQC, technologies that can withstand cyberattacks by quantum computers, ID Quantique, the Swiss startup that IonQ bought last year, sells a PQC appliance called Solteris. It also offers devices that perform related tasks such as generating random numbers. Many encryption algorithms use random numbers as ciphers.

IonQ sees opportunities to sell its products to Elisity customers and vice versa. The latter company has more than 100 clients in verticals such as healthcare, financial services and manufacturing. IonQ also plans to prioritize the public sector as part of its go-to-market push.

“Elisity will bring proven enterprise policy enforcement scale and deployment experience to our quantum security strategy and will give IonQ a strong growth platform to serve customers and create value for our shareholders,” said IonQ Chief Executive Niccolo de Masi.