Prepared remarks
Thank you for standing by. Welcome to the Rigetti Computing First Quarter 2025 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speakers' presentation, there will be a question-and-answer session. As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Subodh Kulkarni, President and Chief Executive Officer. Please go ahead, sir.
Good afternoon, and thank you for participating in Rigetti's earnings conference call, following the first quarter ended March 31st, 2025. Joining me today is Jeff Bertelsen, our CFO, who will review our results in some detail following my overview. We will be pleased to answer your questions at the conclusion of our remarks. We would like to point out that this call and Rigetti's first quarter ended March 31st, 2025 press release contain forward-looking statements regarding current expectations, objectives, and underlying assumptions regarding our outlook and future operating results. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described and are discussed in more detail in our Form 10-K for the year ended December 31st, 2024, our Form 10-Q for the three months ended March 31st, 2025, and other documents filed by the company from time to time with the Securities and Exchange Commission.
These filings identify and address important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. We urge you to review these discussions of risk factors. Today, I'm pleased to report on a number of new developments at Rigetti Computing. As previously disclosed, we have been selected to participate in DARPA's Quantum Benchmarking Initiative. Rigetti will advance to Stage A, a six-month performance period focused on our utility-scale quantum computer concept. Our proposed concept to design and build a utility scale quantum computer combines our proprietary multi-chip architecture with scalable quantum error correction or QEC codes. Our long-time partner and leader in QEC core technology, Riverlane, will collaborate with us on this project to help refine our proposed utility-scale quantum computer concept and validate the underlying technology.
I'm also very excited about our recent AFOSR Award to further develop our breakthrough chip fabrication technology, Alternating-Bias Assisted Annealing or ABAA. We will lead a $5.48 million consortium consisting of Iowa State University, The Royal Melbourne Institute of Technology, The University of Connecticut, and Lawrence Livermore National Laboratory to develop a detailed understanding of how ABAA impacts the chip on a microscopic level, which aims to shed light on defects in superconducting qubits and open new avenues for understanding and mitigating them. We have also been awarded three Innovate UK Quantum Mission Pilot Awards to advance superconducting quantum computing. We will collaborate with Riverlane and the National Quantum Computing Center or NQCC superconducting circuits team to advance quantum error correction capabilities on superconducting quantum computers. The consortium will conduct ambitious QEC tests that advance state-of-the-art metrics and demonstrate real-time QEC capabilities, a requirement for universal fault-tolerant quantum computing.
As part of the project, we will also upgrade our existing quantum computer currently deployed at the NQCC. The upgrades will include deploying a larger 36-qubit quantum processing unit and integrating Rigetti's latest generational control system enabling improved qubit control and a fully programmable low latency interface with Riverlane's QEC stack. We were also awarded two additional Quantum Missions pilot competition projects. We will collaborate with SEEQC to integrate its digital chip-based technology with our 9-qubit Novera QPU hosted at the NQCC, with the goal of identifying and understanding the key components needed for scalable QEC. We will also collaborate with TreQ, Qruise, Q-CTRL, and Oxford Ionics to create an open-architecture quantum computing test bed and deliver an open specification for quantum workflows, creating a common interface between quantum software and hardware.
On the technical update front, our joint paper with Harvard University, Massachusetts Institute of Technology, and the University of Chicago, Coherent control of a superconducting qubit using light, has been published in Nature Physics. Fault-tolerant quantum computing will likely require 10,000 to a million physical qubits. Scaling the systems is challenging because they require bulky microwave components with high thermal loads that can quickly overwhelm the cooling power of a dilution refrigerator. Optical signals have a considerably smaller footprint and negligible thermal conductivity. The team successfully demonstrated the integration of a hybrid microwave optical quantum transducer with a Rigetti-fabricated superconducting qubit. This hybrid setup enables optical control of the qubit, removing the need for coax lines and provides a promising approach to scaling to higher qubit count systems.
We also recently leveraged our new quantum optimization algorithm, quantum preconditioning, to address a power energy grid problem. Using a public dataset representing South Carolina's energy grid, the problem was to compute the maximum power exchange section, a metric that informs on the health and power delivery capability of the energy network. Using Rigetti's 84-qubit Ankaa-3 system, quantum preconditioning was used to boost best-in-class classical optimizers. A relative advantage against the classical baseline was achieved along with a high solution accuracy, highlighting the potential for quantum preconditioning to achieve quantum utility for solving practical optimization problems. Finally, I'm pleased to report that Rigetti has closed its previously announced investment by Quanta Computer, Inc., related to our strategic collaboration agreement. In connection with the closing in late April, Quanta purchased approximately $35 million worth of Rigetti common stock at roughly $11.59 per share. Thank you. Jeff will now make a few remarks regarding our recent financial performance.
Thanks, Subodh. Revenues in the first quarter of 2025 were $1.5 million compared to $3.1 million in the first quarter of 2024. Renewal of the US National Quantum Initiative, sales to US and foreign governments and Novera are all important to future sales. Gross margins in the first quarter of 2025 came in at 30%, compared to 49% in the first quarter of 2024. The lower gross margins on a year-over-year basis were due to ongoing revenues from our contract with the UK's NQCC to deliver a 24-qubit quantum system, which has a lower gross margin profile than most of our other revenue. On the expense side, total OpEx in the first quarter of 2025 was $22.1 million compared to $18.1 million in the same period of the prior year. The increase in total OpEx was due to annual salary increases, new hires, higher FICA taxes related to the vesting of RSUs and the increase in our stock price, and a reduction in the amount of engineering time used to deliver revenue.
Higher stock compensation expenses for employee spot bonuses also contributed to the increase. Stock compensation expense for the first quarter of 2025 was $4.2 million compared to $3 million for the first quarter of 2024. Our operating loss for the first quarter of 2025 came in at $21.6 million compared to $16.6 million in the prior year period. We recorded $42.6 million of net income for the first quarter of 2025 compared to a net loss of $20.8 million in the prior year period. Our net income for the first quarter of 2025 was driven by the non-cash changes in the fair value of our derivative warrant and earn-out liabilities, which had a $62.1 million favorable impact on net income for the quarter. Derivative warrant and earn-out liabilities had a $4.2 million unfavorable impact on our net loss for the first quarter of 2024. As of April 30, 2025, following the closing of the previously announced share purchase by Quanta Computer, cash, cash equivalents, and available for sale investments totaled $237.7 million. Thank you. We would now be happy to answer your questions.
Questions and answers
Certainly. And our first question for today comes from the line of Brian Kinstlinger from Alliance Global Partners. Your question please.
Great. Thanks so much for taking my question. In the past, you highlighted that chip tiling is expected to get Rigetti to 36 qubits at midyear and over 100 by the end of '25 at fidelity rates of 99.75%. I'm curious, we're just a month and a half away from midyear, can you speak to the progress you're making on tiling? And do you think that these time frames are still reasonable?
Sure. Thanks, Brian, for your question. Indeed, deploying chiplets is a very critical part of our strategy because we believe that's a real good way to scale up a number of qubits as we go forward using monolithic die that we have used in the past along with many of our peers' works, obviously, and we have systems that are deployed that are doing well, but we see a significant challenge in squeezing more qubits on a single monolithic die, which is why we deployed the chiplet approach. In the past, we have deployed two chiplets in a system and then last year, we announced that we have done that with two 9-qubit chiplets at a much higher Fidelity level. We feel pretty confident that the chiplet approach with the four 9-qubit chiplets sometime middle of this year and taking it over 100 qubits by the end of this year is going to work. All the data looks promising. We feel optimistic that we should be able to disclose our results as time goes on.
I don't have anything specific to report. I mean, as we have said in the past, our two attempts with two chiplets have worked. All the fundamental data suggest that our attempts at four and eventually multiple chiplets are going to work. This is not just important for Rigetti, but it's frankly important for the whole industry because this is the only way we see how you scale up the qubit counts. Some other companies in superconducting have tried to do larger monolithic chips and they haven't worked quite well. And frankly, the other modalities are significantly behind the superconducting modality in terms of qubit count. So we really don't see them coming to hundreds and thousands of qubits. So we really believe that chiplets is the right way to scale up superconducting qubits and show a path towards the fault-tolerant quantum computing systems. Hope that answers your question, Brian.
For sure, absolutely. I have one follow up and then I'll get back in the queue. I know there were some hearings recently regarding the NQI Reauthorization Act. I'm curious what you're hearing in regards to the new funding bill and how you think about when it might get approved or what you're hearing?
Yeah, certainly, the NQI Reauthorization Act seems to have bipartisan support in our government, and there are multiple versions of the bill that have been floated both in the House and Senate. As of today, it hasn't passed yet. And even after it passes, there is always a time for the money to be appropriated. So we are talking at least a couple of months from now before we actually start seeing money flow out of the NQI Reauthorization Bill. Many of us, we for sure, but many quantum computing companies are eagerly awaiting for the NQI Reauthorization to pass. We are pretty optimistic based on public discussions that it will happen fairly soon.
Great. Thank you.
Thank you. And our next question comes from the line of David Williams from The Benchmark Company. Your question please.
Hey, good afternoon, gentlemen. Thanks for letting me ask a question here. I guess maybe first on the DARPA contract that you won, can you give us a little more information about that? I know this is Phase 1, but how do you expect that to proceed? And what should we be looking for in terms of milestones?
Sure. Thanks for the question, David. I mean, DARPA Quantum Benchmarking Initiative project is an extremely critical project for the country. Its goal is to build utility-scale quantum computing within the next seven years. Really, I mean, we have used words like fault-tolerant quantum computing in the past and essentially it means the same thing, something that really shows our value over the cost is the way our party finds it. Our view is to deliver a system like that you need tens of thousands, if not hundreds of thousands of physical qubits, you need better than 99.9% median 2-qubit gate fidelity, you need faster than 10 nanoseconds gate speed, and you need real-time error correction code. So once again, more than 10,000 qubits, more than 99.9% median 2-qubit gate fidelity, faster than 10 nanosecond gate speed, and real-time error correction. Once you get those kinds of numbers, we believe one will achieve DARPA's milestone of utility-scale quantum computing or what we have commonly referred to in the past as fault-quantum computing.
Extremely important project for the country. We are proud to be selected as one of the groups for Phase A. In a way, it's a vetting process. Our understanding is more than 100 companies applied for that. DARPA has chosen 15 companies within the superconducting camp along with us; it's basically IBM and HP, I believe. And there are some other modalities DARPA has also chosen. This is called Phase A. Over the next six months, DARPA is going to announce the winners of the next phase, Phase B. We expect the number to go down significantly from 15. The actual number will depend on the progress that various companies accomplish. We don't know exactly what other companies are doing. From our standpoint, we know exactly what our plan is and it comes back to what we have publicly stated. We want to demonstrate chiplets. We want to demonstrate higher fidelity than what we have done already. Our current system, as you are probably aware, is at 84-qubit with 99% or 99.5% median 2-qubit gate fidelity depending on what kind of gates you use.
We want to bump that number over 100 qubit, but using chiplets and bump the Fidelity up to 99.5% to 99.7%, again depending on what kind of gates you use. So, we know what we have to do to get from Phase A to Phase B. I assume other companies will be doing their part as well. DARPA has said they will narrow the list down in Phase B and ultimately in Phase C. Eventually, in a year, year and a half, maybe two years from now, we expect one or maybe two companies to be left in that process. Our goal clearly is to be in that final group. That's where the real substantial award will be awarded to build a final quantum computer. So in a way, our view is DARPA's vetting process is a nice validation of our technology. We are proud to be part of the group that has been selected for 15. We certainly want to be part of the next group and the one beyond that. Hope that answers your question?
It does. Thanks so much. That’s exciting to be a part of that initial group. Are there revenues that are associated with each one of those phases as you’re making contributions towards those specs?
We have some revenues, and we have disclosed that Phase A is a $1 million award. We see it as very strategic. As we have previously discussed, our focus as a company is on R&D and technology milestones. Some of these government projects come with significant awards. In this case, Phase A is relatively small; however, the number will increase significantly in Phase B, and it will increase quite a bit in Phase C. So, our current perspective is that we see this as a very strategic project, not primarily from a monetary perspective.
Sure. Okay. Very good. And then just maybe from an interest standpoint from maybe customers that are looking to acquire the processor itself. I know in the past, it seemed like that that pipeline or that interest level has picked up quite a bit. Any thoughts or colors on just maybe how you're seeing customers now? And would you say that the interest is increasing, or have you seen a leveling-off? Anything in terms of just kind of trying to size that interest level that you're seeing on the QPU side? Thank you.
Sure. Thanks for the question. I mean, overall quantum computing continues to be in the R&D mode. Our view is that we are still very much in the stage of developing quantum computers. We are still four to five years away from what we call quantum advantage, which is when you need at least 1,000 qubits, at least 99.8% fidelity median 2-qubit fidelity median and some real-time error correction. Until then, it's going to be primarily R&D, primarily driven by government contracts, and academic researchers. So there, by definition, those kinds of sales are one-off sales; they are lumpy in nature. So I wouldn't really interpret sales from any quantum computing company honestly right now seriously. This is all R&D going on right now. Really the goal should be to get a quantum computer to quantum advantage, and that’s really when commercial sales and sales in general start making sense. And we are talking at least three years from now, maybe four to five years from now.
So until then, this is primarily an R&D kind of a situation. Having said that, I mean, there are government national labs and academic researchers who are interested in using quantum computers, whether they are in the cloud through AWS or Azure or actually getting on-premise quantum computers as we have done with Novera for academic researchers. Interest is definitely there, a lot of this organization depends on DOE funding, which is primarily the NQI Reauthorization. So there is a lack of funding in general for academic institutions right now until the NQI passes and is appropriated. DOD funding situation is a little better and that's where we have seen some of the contracts like the AFOSR contract or the DARPA contract, but a lot of academic institutions and DOE labs certainly depend on the NQI Reauthorization. So overall, even though the interest is there for Novera and on-premise QPUs, I would say lack of funding from the US government is certainly holding that interest from converting to orders.
But again, I'll highlight that our view is we are still very much in R&D. We focus on technology milestones. This one-off sale from government contracts as exciting as they could be, that's not a real metric that we think should be watched at this point. Hope that answers your question.
Yes, sir. Thank you so much for the help. Certainly appreciate it.
Thank you. And our next question comes from the line of Quinn Bolton from Needham & Company. Your question please.
Hi, Subodh and Jeff. Subodh, could you clarify your answer regarding the NQI reauthorization? Do you think it might be signed within the next couple of months? You mentioned it would likely take a couple of months after the bill is signed for the funds to start flowing, but I was unsure if you had any thoughts on when that might happen.
Well, thanks for the question, Quinn. I mean, it was supposed to pass almost a year ago, but still hasn't happened yet, obviously. And this is despite having bipartisan support. So in a way, it is frustrating to see the slow progress of the NQI reauthorization Bill through the House and Senate right now. As I said, there have been multiple versions of the bills that have been floated between the House and Senate. There seems to be bipartisan support as recently as four days ago, I believe there was a hearing on the House floor. Again, we saw bipartisan support for the bill. President Trump has indicated that he supports quantum computing. So no reason to believe it won't pass, but as of today, it hasn't passed. Normally for a bill like this, the appropriations process does take a few weeks, four to six weeks is a normal number that gets used. So once the bill is passed, it still takes a month to two months for money to start flowing to the DOE labs and academic institutions. And that's where really we get funded from. So it will still be a while before we see the benefits of the NQI reauthorization materially translate into our financials.
Understood. My sort of first question was regarding the new award, the UK Innovate Award, I think it was with the NQCC where you're going to upgrade to the 36-qubit QPU with enhanced control. Do you have a timeframe on sort of how long that project runs? Is that something that you could deliver that 36 QPU this year? And I guess related question, you mentioned the gross margin for the NQCC 24-qubit QPU has been below average. Would you expect the 36-qubit QPU to also carry lower gross margins or could that be revenue that comes in at better margins than the initial 24-qubit QPU sale?
I'll start with the second part of your question. Generally, the margins for NQCC are lower than average due to the UK's cost-sharing model. We are willing to operate with lower margins because it is strategically essential for us. Currently, the UK government has recognized us as the technology leader. At the NQCC center in Harvard, near Oxford, the only operational superconducting quantum computer is from Rigetti. The UK government has shown a lot of trust in us by allowing the development of their ecosystem using our technology. We are committed to supporting this, even though it results in lower gross margins for us, as it is crucial for our role in the UK quantum ecosystem. Regarding the first part of your question, we have mentioned before that while we introduced the 24-qubit system at the NQCC, the actual chip used in that system is an 84-qubit chip. Upgrading the existing system to 36-qubits mainly involves updating our cables and wires, making this a straightforward option if the UK wants to upgrade soon.
However, we prefer to first demonstrate the chiplet approach with 4x9 qubits, achieving high fidelity of 99.5% for a generic gate and 99.7% for a superconducting gate. Our goal is to showcase this technology in California before bringing it to the UK. We aim to upgrade them to the chiplet approach and 36-qubits in the latter half of this year. Nevertheless, we could expedite their upgrade to 36-qubits using the existing Ankaa-3 chip, which is an 84-qubit chip, if they desire it immediately. I hope this answers your question.
Got it. It sounds like you have two options; you could either upgrade the current 84-qubit QPU or introduce the 36-qubit tile after demonstrating it in the second half of the year. I think that's clear. The other question is more of a long-term technical inquiry. To achieve utility scale computing, you outlined four key criteria, one of which is increasing gate speeds. Currently, your gate speeds are in the tens of nanoseconds range, and you aim to reduce that to 10 nanoseconds. How do you plan to accomplish that? Is it about using smaller qubits and circuitry, or is it simply optimizing the control signals? How do you increase the gate speed on the QPUs? Thank you.
Great question, Quinn. Let's start by discussing our gate speeds. Currently, our Ankaa-3 system deployed on AWS and Azure, which features 84 qubits, has a gate speed of approximately 70 nanoseconds. When we look at the wider landscape of superconducting gate-based quantum computing companies, our gate speeds generally fall within the range of 50 to 100 nanoseconds. There can be slight variations based on specific technologies, but they typically land in that range. There are numerous factors that can enhance gate speeds. It's important to highlight the significance of gate speed, which often gets overlooked. In comparison to trapped ion or pure atomic modalities, whose gate speeds range in the hundreds of microseconds, superconducting modalities are significantly faster, operating 1,000 to 10,000 times quicker. In practical terms, this makes a huge difference, as I've never encountered a customer who desires a computer that operates 10,000 times slower.
Therefore, it's crucial for trapped ion and pure atomic modalities to enhance their gate speeds to remain competitive with superconducting systems, which presents them with numerous scientific challenges. Returning to the superconducting side, our primary advancement in gate speed came from transitioning from fixed coupler technology to tunable coupler technology. This switch, first implemented with Ankaa-2 and further refined with Ankaa-3, has led us to achieve gate speeds in the 50 to 100 nanoseconds range. We've also observed some of our peer companies in superconducting modalities undertaking similar improvements. The type of gates we utilize, such as Controlled-Z, iSWAP, or fSim, also significantly affects gate speed, as they determine how swiftly operations can be performed. Additionally, other crucial factors include the strength of coupling between the qubits, which relates to the chip’s geometry and design. There are many aspects we can optimize to help enhance our gate speed. Our commitment is to continue improving this vital metric. I hope that addresses your question.
Yeah, that was great. Thank you, Subodh.
Thanks, Quinn.
Thank you. And our next question comes from the line of Krish Sankar from TD Cowen. Your question please.
Hi, everyone. This is Steven speaking on behalf of Krish. Thank you for taking my questions. My first question is for Subodh regarding the ABAA development consortium. Can you explain how the $5.48 million grant award will be distributed among the partners in that consortium? I also have a follow-up question on that.
We don't want to go into the specifics of how the award will be divided among the partners. The majority of that award will come from various partners. However, it's not crucial to focus on the exact number since this project is immensely important for us and the industry as a whole. We don't want to downplay its significance by getting into the minute details. The ABAA technology is vital for advancing our superconducting gate-based quantum computing. The initial results we shared last year were encouraging. The DOD, specifically the Air Force’s AFOSR organization, is keen for us to speed up the commercialization of this technology because of its importance. We've partnered with renowned labs, including Lawrence Livermore National Lab and Ames Lab, along with several universities that have top researchers in related fields. Therefore, we view this award as a crucial strategic win for the entire industry and certainly for our company. I’d prefer not to discuss the breakdown if that’s alright with you.
That's reasonable. I also wanted to ask about ABAA. From a technology standpoint, I realize that advancements in technology contribute to enhancing the quality of the qubits. However, I would like to explore this topic further. Does ABAA help improve the consistency of behavior across various gates, or does it address another aspect of superconducting gate performance?
In general, we are currently using ABAA for frequency targeting. When we create qubits, they respond to a range of frequencies. It's crucial for us to have precise control over which frequency they respond to because targeting qubits at a specific frequency allows us to define coupling and other interactions. ABAA significantly aids our control over the qubit manufacturing process by providing us with precise frequency control. We have published papers demonstrating that when comparing scenarios with and without ABAA, we achieve a reduction in distribution spread of around tenfold or more. Thus, ABAA is vital for controlling the frequency targeting of qubits and improving the overall process control.
Got it, understood. And just also for my final question, I have one for Jeff on OpEx. Jeff, just wondering, after Q1's $22 million in OpEx, and I understand there's a number of, I guess, seasonal increases and bonuses baked in there. Just wondering for the June quarter and onwards, is like a high teens million OpEx run rates goal the right number to be thinking about, or is this low 20s level the more appropriate number we should be mulling for? Thank you.
Yeah, I mean, I think certainly this quarter, as I had mentioned, there were a couple of factors that caused OpEx to be a little bit high in Q1, but FICA tax was one. There were some spot bonuses that impacted stock compensation expense. So, going forward, hopefully we'll see a little bit of a reduction.
Thank you. And our next question comes from the line of Richard Shannon from Craig-Hallum. Your question, please.
Well, hi, Subodh, and Jeff, thanks for taking my questions. Subodh, maybe I'll ask you a question on one of the things you mentioned as well as in the pressure list here about optical signaling. I guess maybe if you could talk about the importance of that, and then also let me get a sense of when you think this enters the roadmap. Are we getting close to that timeframe, or is it still kind of early-stage R&D?
Thank you for your question, Richard. Optical signaling is a significant part of our roadmap and the industry’s as well. Currently, we rely on coax cables for signal transmission in the dilution refrigerator, which works well at the 100-qubit level, and we believe it can extend to several hundred qubits. However, as we scale up, space becomes a constraint within the dilution refrigerator system. We are testing flex cables alongside other industry players, and we see their potential for facilitating a transition from coax cables for a few hundred to possibly a few thousand qubits. Yet, even flex cables will not suffice for the scale we need to achieve tens of thousands of qubits or meet DARPA's requirements for advanced quantum computing systems. This is why we are exploring optical cables. Previous studies demonstrate the feasibility of converting microwave signals, which we use to control qubits, to optical signals, and there has been collaboration with partners like QphoX and recently Harvard University to show how this can be implemented using fiber optic cables rather than just open air optics.
This is crucial as it makes the technology more practical in real-world applications. We are now considering utilizing fiber optic cables both going into and coming out of the dilution refrigerator, as their size is significantly smaller than that of flex cables. This offers considerable advantages in terms of space and thermal load, which affects cooling times. We aim to transition from coax cables to flex cables and eventually to fiber optics as quickly as possible. Currently, we expect to stick with coax cables for the next year or two, possibly up to three years, and transition to flex cables. It will likely be around three to four years before we start integrating fiber optics into our roadmap as well as the industry's. We are at the forefront of this development, and once we establish its effectiveness, other industry players are likely to follow suit. I hope that answers your question.
That answered completely, Subodh. Thanks for that. My other question is, I'm not sure if it's for Subodh or Jeff here, but when we look collectively at the NQCC revenue opportunity as well as the Air Force, I forgot what the acronym is there, I think the $1 million there, what do we think about in terms of the timeframe over which that will be recognized? Maybe even if you could elaborate how much we might see recognized this year.
Sure, I'll address the NQCC opportunity first. It extends over a year, so I expect the revenue to be recognized gradually throughout the next year. Regarding the Air Force contract, we estimate it to generate about $1 million in revenue for the upcoming year. It's a three-year contract overall, but for next year, the anticipated revenue is approximately $1 million.
Thank you. And our next question comes from the line of Craig Ellis from B. Riley Securities. Your question, please.
Yeah, thanks for taking the question and apologies if asked, I hopped in a little late. Subodh, I wanted to start off just by going back to the DARPA Stage A and congratulations on making it to that level. But the question is this, what specifically are they looking for in Stage A? What boxes does Rigetti need to check to move on to the next phase of that program after Stage A?
So overall, our goal for the DARPA project is utility-scale quantum computing in the next six to seven years. There are three stages: Stage A, Stage B, and Stage C. We have been selected for Stage A. To advance to Stage B, we need to execute the roadmap we have made public. This means demonstrating the chiplet approach with the first of 4x9 qubits at very high fidelity, specifically 99.5% for general gates and 99.7% for fSim type gates. If we achieve this by mid-year, as planned, and demonstrate more than 100 qubits using the chiplet approach at similar fidelity levels, we believe that will be sufficient for us to move into Phase B. It establishes us as a leader in the superconducting field by demonstrating a chiplet with over 100 qubits at 99.5% median 2-qubit gate fidelity. We are not aware of the exact roadmaps or commitments of other companies to DARPA, so we cannot comment on them. However, as far as we are concerned, executing our publicly disclosed roadmap should allow us to participate in Phase B.
Excellent. Thank you. And then the follow-up question is related to the Quanta relationship. So a quarter ago, we announced the relationship; it was very significant. This quarter, we announced that the investment of $35 million disclosed, so that's further tightened and solidified the relationship. The question is this, as investors and analysts look at what the next steps are for that relationship, can you help us with some things that would be reasonable milestones from here through the end of this year and then some things that would be on the 2026 roadmap to help us understand where that relationship can go for the company? Thank you.
Thank you for the question. Quanta is a very strategic partner for us moving forward. As we announced, we received $35 million for approximately 3 million shares at $11.59. More importantly, a couple of months ago, we stated that they are committed to investing $250 million over the next five years in the non-QPU hardware part of the stack. This part includes control systems, dilution refrigerators, cables, chassis, and other components, which is Quanta's area of expertise. They play a key role in the CPU and GPU server ecosystem and are a global leader in that field. Their investment brings their knowledge and high-volume, low-cost manufacturing capabilities. This means we will invest less in that part of the stack, easing our need for R&D funding there. This allows us to concentrate on the QPU portion, which involves chip design, fabrication, and immediate hardware. Long term, we see the partnership evolving. Currently, we are closely collaborating with them, training them to be our contract manufacturer or ODM partner and to develop our control system that integrates with our stack. By this time next year, I expect them to handle most of the control systems' R&D and begin taking on other hardware aspects, relieving us from the burden of R&D in those areas. I hope this clarifies how we see the partnership progressing.
It does. And it would seem to mean that either, A, R&D at current levels would refocus to something that's much tighter and more core to scaling up qubit quality and qubit count, or potentially R&D would go down, but it gives you a lot of degrees of freedom with how you allocate R&D dollars given the narrower focus that you'll be able to have at that point.
That's correct. I mean, it's primarily to help accelerate our timeline to market. Quanta obviously is a terrific partner, ODM company. They will certainly help us on the high volume manufacturing side as business really becomes commercial-type business in the next three to four years. Thank you all for your interest and questions. We look forward to updating you with our progress at the end of next quarter. Thank you.
Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.