IBM Confirms $10 Billion Quantum Investment Despite Quarterly Shortfall

IBM has reaffirmed its previous plans to invest more than $10 billion in quantum computing over the next five years, positioning the technology as a central part of its long-term strategy even as the company reported weaker-than-expected second-quarter performance.

In a recent letter to investors, IBM Chairman and CEO Arvind Krishna said the investment would cover research and development, capital expenditure, manufacturing expansion, acquisitions, and broader ecosystem development. The company also maintained its target of delivering its first large-scale fault-tolerant quantum computer by 2029.

“…quantum computing is no longer decades away, it is upon us, and we are investing aggressively,” Krishna wrote.

The comments appeared in IBM’s preliminary financial results for the second quarter of 2026. The company reported revenue of $17.2 billion, representing year-over-year growth of 1%. Software revenue increased by 5%, consulting revenue remained flat and infrastructure revenue declined by 7%.

IBM attributed the infrastructure decline partly to weaker-than-expected performance from its Z mainframe business and associated transaction-processing software. According to Krishna, several major customer deals did not close within the expected period as organizations redirected capital spending toward servers, storage and memory amid supply constraints and anticipated price increases.

The company also cited rapidly evolving cybersecurity concerns as a distraction for customers during the quarter.

Despite the shortfall, IBM highlighted several areas of growth, including an 11% increase in Red Hat revenue and record performance within its distributed infrastructure business. IBM said distributed infrastructure revenue rose 37%, supported by demand for Power systems and storage.

The company also recently announced a letter of intent with the U.S. Department of Commerce to develop Anderon, which IBM described as the world’s first dedicated quantum wafer foundry. The project would be supported by $1 billion in incentives through the CHIPS program and an additional $1 billion contribution from IBM.

A dedicated foundry could give IBM greater control over the fabrication and scaling of quantum processors while supporting the transition from experimental devices to more standardized production. Manufacturing reliability, yield and supply-chain capacity will become increasingly important as quantum systems move toward larger numbers of physical and logical qubits.

IBM’s planned $10 billion investment also speaks to another trend in the quantum sector. Major technology companies are no longer investing only in processors. They are building integrated ecosystems that include hardware, error correction, software, cloud access, application research and partnerships with enterprises and research institutions.

For IBM, the challenge will be balancing those long-term investments with pressure to deliver stronger near-term financial performance.