D-Wave and AT&T expand quantum computing use across network operations

D-Wave Quantum Inc. (NASDAQ: QBTS) and AT&T Inc. (NYSE: T) have expanded their commercial relationship to apply quantum computing across complex telecommunications network operations. AT&T plans to integrate D-Wave’s annealing quantum technology with agentic artificial intelligence tools used for outage management, technician routing, network planning and traffic optimisation. An early workload reportedly reduced processing time from approximately one hour to less than 15 seconds, giving the partnership a measurable operational result rather than another theoretical quantum computing demonstration. The agreement matters because telecommunications networks contain large optimisation problems that may be better suited to near-term quantum annealing than the fault-tolerant gate-model applications expected later in the industry’s development. D-Wave shares closed at $18.08 on July 31, gaining about 11.5% over five trading sessions but remaining approximately 24.6% lower over one month ahead of second-quarter results scheduled for August 6.

Why does AT&T’s expanded D-Wave agreement represent a more credible quantum computing test?

Quantum computing announcements often describe scientific milestones without identifying the commercial process being improved, the time saved or the person responsible for implementing the technology. The AT&T agreement is more useful because it connects quantum computing with recognisable operating problems inside one of the largest communications networks in the United States.

AT&T initially used D-Wave technology for a network optimisation workload that previously required about one hour of processing. The quantum-based approach reduced that time to less than 15 seconds, creating the possibility of decisions being updated far more frequently as network conditions change.

The expansion will examine outage detection and response, technician routing, network construction planning and traffic management. These problems require AT&T to evaluate enormous numbers of possible schedules, routes, equipment configurations and resource allocations while respecting practical constraints involving geography, workforce availability and service priorities.

A classical computer can solve many of these problems, but the time required can rise rapidly as the number of variables increases. A plan that takes an hour to produce may already be outdated when an outage is moving across a network, customers are reporting new failures or technicians have been reassigned.

Faster optimisation does not automatically prove that quantum computing is superior across every scenario. AT&T must compare solution quality, operating cost, reliability and integration complexity against advanced classical algorithms. The important development is that the comparison is taking place inside operational network tools rather than within a research environment designed primarily to make the technology look impressive.

The agreement’s commercial value remains undisclosed. Investors therefore do not know whether AT&T is making a material financial commitment or expanding a relatively small evaluation programme. The absence of contract value limits the immediate revenue conclusion, but it does not eliminate the strategic importance of a large enterprise broadening a quantum deployment after obtaining a measurable result.

Why is quantum annealing suited to telecom network optimisation before fault-tolerant systems arrive?

D-Wave’s current commercial strength is quantum annealing, a specialised approach designed to find efficient solutions to optimisation problems. It differs from gate-model quantum computing, which aims to execute sequences of quantum operations that may eventually support applications involving chemistry, cryptography, simulation and complex algorithms.

Telecommunications networks are filled with optimisation tasks. AT&T must determine which technicians should be sent to which locations, how network traffic should be routed, where infrastructure should be built and how equipment should be configured when demand or service availability changes.

Each decision contains constraints. A technician may need a particular skill, vehicle or replacement component. A repair must be prioritised by the number of customers affected, the contractual importance of the site and the distance from available personnel.

The number of possible combinations can become enormous even when the underlying business question appears simple. Quantum annealing is intended to explore that solution space and identify a strong answer without examining every possible combination sequentially.

This gives D-Wave an opportunity to produce revenue before universal fault-tolerant quantum computers become commercially available. The company does not need to wait for a system capable of solving every class of quantum problem when customers already face optimisation workloads that can be addressed through annealing and hybrid quantum-classical methods.

The narrower scope is also a limitation. Quantum annealing is not interchangeable with the gate-model technology being developed by International Business Machines Corporation, Alphabet Inc., Microsoft Corporation, IonQ, Inc. and other competitors. D-Wave must persuade customers that a specialised system can create sufficient economic value even when it does not address every anticipated quantum application.

D-Wave has attempted to resolve that limitation through its acquisition of Quantum Circuits, Inc. The $550 million transaction added superconducting gate-model technology and made D-Wave a dual-platform company developing both annealing and gate-model systems.

The strategy gives D-Wave a near-term commercial product and a longer-term fault-tolerant roadmap. It also increases development costs and management complexity because the company must fund two distinct technology programmes while converting a relatively small revenue base into a sustainable business.

How could quantum computing improve the agentic AI systems already operating AT&T’s network?

AT&T is not introducing quantum computing into an empty technology environment. The company already uses artificial intelligence, automation, analytics and software-defined infrastructure to operate and expand its fibre and 5G networks.

Its agentic artificial intelligence tools contributed to a reduction of approximately 12 million hours of customer downtime during 2025. These systems can detect problems, analyse network information and recommend or initiate operational responses.

Adding quantum optimisation could improve the decision layer behind those agents. An artificial intelligence agent may identify that several network sites require attention, but it still needs to determine the most efficient sequence of repairs, personnel assignments and traffic adjustments.

Classical artificial intelligence is effective at prediction, pattern recognition and interpreting unstructured data. Quantum annealing is intended to address the combinatorial optimisation problem that follows after the system identifies what needs to be done.

The combination could create a more complete operating loop. Artificial intelligence detects a developing outage, quantum optimisation evaluates possible responses, and automated systems update routes or work orders while human supervisors retain authority over higher-risk decisions.

This is strategically more interesting than positioning quantum computing as a replacement for artificial intelligence. The technologies perform different functions, and the commercial value may come from combining them rather than forcing customers to choose between them.

Integration risk remains substantial. Network data must be translated into a mathematical problem suitable for the quantum system, while results must be returned quickly enough to affect real operations. The system must also handle incomplete information and changing conditions without producing recommendations that appear mathematically efficient but are operationally impractical.

AT&T will need governance rules determining when automated actions are permitted and when human approval is required. A faster answer is not necessarily a safer answer when the system can alter customer traffic or redirect repair resources during a major service disruption.

Can the AT&T relationship help D-Wave convert quantum interest into recurring commercial revenue?

D-Wave has spent years arguing that annealing quantum computing can solve practical problems today. The AT&T agreement gives the company a customer whose network scale, technical expertise and operational complexity can provide valuable external validation.

The commercial opportunity is larger than one optimisation workload. A successful deployment could expand across different AT&T business units, geographic regions and network-planning functions. It could also encourage other telecommunications companies to examine comparable use cases.

Telecom operators face similar problems involving base-station placement, spectrum allocation, fibre construction, maintenance scheduling and traffic management. D-Wave could turn AT&T’s work into repeatable industry solutions rather than building every project from the beginning.

Repeatability is essential because custom consulting can generate revenue without creating scalable economics. D-Wave needs software templates, hybrid solvers and implementation methods that can be adapted across customers with less engineering effort.

The company recognised first-quarter revenue from more than 100 customers, with commercial enterprises representing more than half of that total. However, quarterly revenue was only $2.9 million, down 81% from a year earlier because the comparison period included a $12.6 million quantum system sale.

First-quarter bookings reached a record $33.4 million, including a $20 million system order that will be recognised in future periods. Remaining performance obligations increased to $42.4 million, with approximately 54% expected to convert into revenue within 12 months.

The figures illustrate both promise and volatility. Bookings and contracted obligations are rising, but reported revenue remains dependent on the timing of large system transactions. Cloud access, software and recurring enterprise agreements could create a more stable revenue base than occasional hardware sales.

The AT&T contract would be particularly meaningful if it develops into a multi-year production agreement with predictable usage and expansion terms. Without disclosed economics, the market must wait for D-Wave’s future bookings, revenue and customer commentary to determine whether the relationship is commercially material.

What do D-Wave’s latest financial results reveal about the cost of its dual-platform strategy?

D-Wave ended the first quarter with approximately $588.4 million in cash and marketable securities. That liquidity provides room to finance product development, commercial expansion and the integration of Quantum Circuits.

The company’s operating cost structure has increased rapidly. First-quarter operating expenses rose 125% to $56.5 million, including acquisition-related costs, higher research and development spending, additional sales personnel and increased fabrication expenses.

The adjusted earnings before interest, taxes, depreciation and amortisation loss widened to $32.8 million from $6.1 million a year earlier. Net loss reached $18.4 million, compared with $5.4 million in the first quarter of 2025.

Part of the increase reflects deliberate investment in the gate-model programme acquired through Quantum Circuits. D-Wave plans to deliver a 17-physical-qubit gate-model system during 2026, followed by larger systems intended to demonstrate progressively stronger error correction.

The roadmap targets a 49-physical-qubit system in 2027 and a 181-physical-qubit design in 2028. These milestones are intended to establish the architecture required for scalable fault-tolerant quantum computing rather than generate meaningful near-term revenue.

D-Wave therefore faces a difficult capital-allocation balance. The company must continue improving annealing products that support present commercial demand while financing a gate-model programme needed to address the wider future market.

The AT&T agreement supports the first side of that strategy. It shows that annealing can remain commercially relevant even as much of the industry focuses on fault-tolerant gate-model systems.

The August 6 earnings report should provide updated information on revenue conversion, cash use, bookings and the Quantum Circuits integration. Investors will also look for any indication that AT&T or other commercial relationships are moving from evaluations into production-scale commitments.

Why could the quantum programme matter to AT&T’s wider fibre and 5G investment economics?

AT&T is investing heavily to expand its fibre footprint, improve wireless capacity and migrate customers away from legacy copper infrastructure. Second-quarter capital investment reached $6.1 billion, compared with $5.1 billion a year earlier.

The company added more than one million fibre locations during the quarter and expects annual capital investment of between $23 billion and $24 billion. At that scale, small improvements in planning, construction sequencing and technician productivity can have meaningful financial effects.

AT&T generated second-quarter revenue of $31.56 billion, up 2.3% from a year earlier. Adjusted earnings before interest, taxes, depreciation and amortisation increased 5.2%, while free cash flow rose to $4.7 billion.

Advanced Connectivity service revenue increased 5.1% and represents more than 90% of AT&T’s service revenue. The segment includes the fibre and wireless infrastructure that will produce many of the optimisation problems addressed through D-Wave’s technology.

AT&T is also targeting $4 billion of consolidated annual cost savings by the end of 2028. Quantum computing will not deliver that target alone, but faster network planning and reduced customer downtime could contribute to a broader programme involving automation and operating simplification.

The economic test should focus on avoided costs rather than the novelty of the technology. AT&T needs to calculate whether quantum-assisted optimisation reduces truck rolls, repair times, network congestion or construction delays by enough to justify implementation and computing expenses.

A successful system may also improve customer retention. Network reliability affects churn, and reduced downtime can protect revenue without requiring additional subscriber acquisition spending.

AT&T’s size means it can evaluate emerging technologies without placing the core business at risk. D-Wave benefits from access to complex workloads and a credible customer, while AT&T gains an opportunity to improve network economics without building quantum hardware internally.

What does the latest D-Wave and AT&T stock performance reveal about investor sentiment?

D-Wave shares closed at $18.08 on July 31, gaining 0.6% during the session. The stock was approximately 11.5% above its July 24 close of $16.21, reflecting the initial enthusiasm surrounding the expanded AT&T agreement.

The five-session gain conceals substantial volatility. D-Wave jumped more than 20% on July 27 before falling during the following two sessions and recovering partly on July 30.

The stock remained approximately 24.6% below its June 30 close of $23.99. It traded within a 52-week range of $12.75 to $46.75, placing the July 31 close about 61% below the high and nearly 42% above the low.

D-Wave’s market capitalisation was approximately $6.6 billion despite first-quarter revenue of only $2.9 million. The valuation reflects expectations for future quantum adoption rather than the scale of the current income statement.

This creates an unusually high execution threshold. Investors are assuming that bookings convert into revenue, enterprise deployments expand and the gate-model roadmap remains technically credible. Any delay or weak quarterly conversion can produce sharp movements because conventional valuation measures offer limited support.

AT&T shares closed at $23.25 on July 31. The stock was approximately 3.3% below its July 24 price but about 12.3% above the June 30 close of $20.70.

AT&T traded within a 52-week range of approximately $19.89 to $29.79. The July 31 close was about 22% below the high and 17% above the low.

The D-Wave agreement is too small relative to AT&T’s financial scale to become a direct stock catalyst. Its relevance lies in supporting cost transformation, network reliability and capital efficiency over time.

Investor sentiment toward AT&T remains driven by fibre growth, wireless subscriber performance, free cash flow, capital spending and debt reduction. Quantum optimisation becomes financially meaningful only when AT&T can show measurable savings or service improvements across a large portion of the network.

What milestones will determine whether AT&T’s quantum expansion becomes a production success?

The first milestone is evidence that the 15-second processing result can be repeated across larger and more dynamic network workloads. A controlled optimisation result is valuable, but production systems must perform reliably when data changes continuously.

The second milestone is solution quality. AT&T must demonstrate that the faster quantum-assisted answer is at least as accurate and operationally useful as the best classical alternative.

The third milestone is integration with agentic artificial intelligence. Quantum optimisation must become part of the existing network workflow rather than remain a separate specialist tool requiring manual intervention.

The fourth milestone is measurable business value. Reduced outage duration, fewer technician miles, improved traffic management or faster network construction would provide a stronger commercial case than processing speed alone.

The fifth milestone is contract expansion. D-Wave needs AT&T to move from exploratory use cases toward recurring production consumption with disclosed or observable revenue impact.

The sixth milestone is customer replication. Similar deployments with additional telecommunications operators would show that the solution can become an industry product rather than a customer-specific project.

The seventh milestone is financial conversion. D-Wave’s August 6 results and subsequent quarters must show that record bookings and remaining performance obligations are producing sustained revenue growth.

The AT&T agreement does not prove that quantum computing has crossed into mainstream enterprise adoption. It does provide a clearer route than many industry announcements because it starts with an expensive operating problem, produces a measurable speed improvement and connects with systems already used in production.

What are the key takeaways from D-Wave and AT&T’s expanded quantum computing agreement?

• AT&T is expanding the use of D-Wave’s annealing quantum technology across network optimisation workloads.
• An early application reduced processing time from approximately one hour to less than 15 seconds.
• Planned use cases include outage response, technician routing, network construction planning and traffic management.
• D-Wave’s quantum technology will be layered into agentic artificial intelligence tools already supporting AT&T’s network operations.
• The agreement gives D-Wave a practical commercial use case while the broader industry continues developing fault-tolerant gate-model systems.
• D-Wave’s $550 million Quantum Circuits acquisition added gate-model technology but significantly increased operating costs.
• First-quarter bookings reached $33.4 million, while reported revenue remained only $2.9 million and the adjusted EBITDA loss widened to $32.8 million.
• D-Wave shares gained approximately 11.5% over five sessions but remained about 24.6% lower over one month as of July 31.
• AT&T’s stock reaction was limited because the agreement is not yet material relative to its $31.56 billion quarterly revenue base.
• Production deployment, measurable cost savings and D-Wave’s August 6 earnings will determine whether the partnership supports lasting investor confidence.