Quantum Computing Inc. ($QUBT): The Smoke, Mirrors, and Red Flags Behind the Quantum Revolution

Uncovering the gaps between QUBT’s billion-dollar claims and its underwhelming execution in the quantum tech space.

Quantum Computing Inc

Quantum Computing Inc. ($QUBT) has built its narrative on the promise of cutting-edge quantum technology, pioneering photonic chips, and a “quantum-ready” future. On the surface, it’s a story of innovation, billion-dollar breakthroughs, and transformative partnerships. But beneath the glossy veneer lies a troubling tale of pivots, hollow partnerships, underwhelming execution, and financial missteps.

This is a deep dive into QUBT, a company that claims to be leading the quantum race but might be sprinting in place.

Act I: A Company in Search of Itself

QUBT’s journey reads like a masterclass in reinvention, chasing trends to remain relevant:

• 2001: Founded as Ticketcart, selling inkjet cartridges online.
• 2007: Rebranded as Innovative Beverage Group Holdings (IBGH), entering the beverage market.
• 2017: A shareholder lawsuit alleging fraud led to court-ordered receivership.
• 2018: Rebranded as Quantum Computing Inc., pivoting to quantum software development.
• 2023: Announced plans for a quantum photonic chip foundry to ride the semiconductor boom.
• 2024: Jumped on the AI bandwagon with a pending acquisition of millionways, which has yet to close.

This series of pivots isn’t a sign of innovation but rather a frantic effort to follow the next big trend.

SEC Filing

Act II: The Underwhelming Tempe Foundry

At the heart of QUBT’s claims lies its Quantum Photonic Chip Foundry in Tempe, Arizona. Announced in 2023 as a groundbreaking facility, it was designed to produce Thin-Film Lithium Niobate (TFLN) photonic chips — technology promising faster data processing and energy efficiency.

The reality, however, paints a far less inspiring picture:

• Idle Equipment: Observers report that machinery remains new and unused.
• No Workers: The foundry is eerily silent, with no engineers or production activity.
• Limited Scale: For a company touting billion-dollar potential on time and space enduring TFLN chips, the facility is shockingly small.

Meanwhile, competitors like Hyperlight and Lightium are far more credible:

• Hyperlight: A Harvard spinout backed by Summit Partners ($35B AUM).
• Lightium: Funded by VSquared Venture ($450M AUM) and Lakestar ($2B AUM).

In comparison, QUBT’s Tempe foundry feels more like a prop than a production powerhouse.

A Real Quantum Computing Setup

Quantum Computing Inc’s Setup

Act III: Hollow Partnerships and Empty Promises

QUBT announced partnerships with Spark Photonics and Alcyon Photonics, creating the impression of collaboration and progress. However, these are nothing more than non-binding Memorandums of Understanding (MOUs), offering no legal or operational commitment.

QUBT’s reliance on MOUs underscores its struggle to build credible alliances.

Act IV: Quantum or Just Quantum-Sounding?

QUBT markets itself as a quantum computing leader, but the fine print reveals reliance on quantum annealing, a limited technology that falls short of true quantum computing:

• Quantum Annealing: Effective for specific optimization problems like logistics and portfolio balancing but incapable of broader computational breakthroughs.
• True Quantum Computing: Harnesses gate-based systems for transformative applications in cryptography, AI, and molecular simulation.

By labeling itself “quantum-ready,” QUBT blurs the line between annealing and true quantum computing, misleading investors about its technological capabilities.

Act V: Dilution, Toxic Financing, and Financial Missteps

QUBT’s financial maneuvers are riddled with red flags:

1. Toxic Financing: QUBT relies on Streeterville Capital, a notorious “death spiral” lender.

• Relentless Dilution: Outstanding shares ballooned from 64 million to 89 million in just a year.
• Shares are issued at steep discounts, collapsing value for existing shareholders.

1. Disastrous Financials:

• 2024 R&D Spending: $6.5 million.
• 2023 R&D Spending: $4.6 million.
• Revenue (2024 YTD): A paltry $311,000, while losses from operations reached $17 million.

1. Operational Red Flags:

• Delayed Filings: Chronically late financial reports reflect weak internal controls.
• Executive Turnover: High leadership churn undermines stability.
• Going Concern Warnings: Auditors have repeatedly questioned QUBT’s ability to remain solvent.

Despite burning through over $11 million in R&D, QUBT has delivered little to justify its lofty promises.

Act VI: The Illusion of Progress

Even QUBT’s much-touted $26,000 NASA contract to support phase unwrapping — a niche optimization project — feels more like PR than progress. For a company claiming billion-dollar breakthroughs, this contract is a token gesture, not a milestone.

QUBT’s 5 Year Awarded Contracts

Act VII: A Legacy of Hype

From inkjet cartridges to photonic chips, QUBT’s history is a tale of buzzword chasing. Every pivot — whether to quantum computing, AI, or semiconductors — aligns with the hottest market trend, yet substantive results remain elusive.

The Bottom Line: Promises Without Progress

Quantum Computing Inc. sells a vision of the future, but its actions and results don’t align:

• A underwhelming foundry in Tempe.
• Hollow partnerships with no binding commitments.
• Over $11 million spent on R&D with minimal revenue.
• Toxic financing that erodes shareholder value.

In an industry where genuine innovation is critical, QUBT stands as a cautionary tale. Investors should dig deeper and demand more than hollow promises and hype-driven press releases.