Photo: Arqit

Arqit Quantum is canceling its plans to build quantum satellites, announcing Wednesday its software technology has progressed and it no longer needed its own in-space assets.

Arqit, based in the United Kingdom, is a company that focuses on quantum encryption. Its software QuantumCloud creates encryption keys for zero trust security. The company went public in September through a special purpose acquisition company (SPAC) merger. 

The company had plans to launch a network of satellites to create and transmit the quantum keys, but did not announce its manufacturer. 

“Through technical innovation we have emulated the relevant quantum processes of creating and distributing random numbers in software form so that the QuantumCloud tech stack no longer requires satellite infrastructure,”  the company announced Wednesday in its full year financial results.

The company said that a recent security proof demonstration by the GCHQ Accredited Centre of Excellence in Cyber Security helped it decide it did not need satellites. Now, it will recoup capitalized costs, saying it will partially or totally sell the satellite system that is currently under construction. It will also license its quantum satellite intellectual property. 

“Innovation in the delivery of replicated randomness to data centers globally has eliminated the need for satellite distribution within our tech stack. This development is not only expected to have a positive impact on Arqit’s future financial results, it allowed us to reconsider our role in building satellites for third parties, particularly government and military customers,” Arqit CEO David Williams commented. 

“Going forward for these customers, who are interested in the unique properties which the satellite distribution method offers in sovereign, on-premises control of key agreement and eavesdropper detection, we will license our patented ARQ19 satellite technology to build their own satellites and they will then purchase a QuantumCloud license from Arqit,” Williams added. 

The company had a number of deals in the space industry. Virgin Orbit invested in its SPAC, was a customer, and was set to launch two of its satellites. Arqit was also tapped to lead a “space bridge” project between the UK and Australia, bringing its Federated Quantum System to Australia. 

In fiscal year 2022, the company reported $20 million in revenue, compared to $48,000 in fiscal year 2021. Operating loss for the period was $52.1 million versus a loss of $172.6 million for fiscal year 2021.