The quantum computing industry is evolving quickly. Hundreds of millions of dollars in government funding are in play, and quantum firms are making rapid pivots into industries ranging from defense to software and beyond.
Newer entrants to the space, like French firm Pasqal (NASDAQ: PSQL), face a difficult battle against established competitors. As a result, these firms must differentiate themselves to stand out and find a niche, while also seeking ways to generate sustainable profits.
Although it has only been publicly traded since late August 2026, Pasqal has already sought to make a name for itself through a unique partnership with USA Rare Earth Inc. (NASDAQ: USAR), a niche critical-minerals company and one of the leading domestic producers of rare materials such as terbium and neodymium.
Pasqal's recently announced strategic collaboration with USAR—which also includes Riven Systems, a chemistry and industrial AI firm—could have far-reaching implications outside of the quantum space.
How Pasqal May Get Involved in Rare Earth Separation
Mining for rare earth minerals is a difficult process, not only because of the challenge of extracting the ore itself. Following that, companies must be able to separate out different rare earth elements into high-purity individual oxides.
Because rare earth elements often tend to occur together and have very similar chemical properties, isolating them in this way can be quite challenging—and the process to do so involves many (sometimes even hundreds of) solvent extractions. There is an enormous chemistry problem involved: how do companies identify a series of solvents that will selectively bind one rare earth element over another?
Solvent and ligand chemistry as it relates to rare earth mining is, therefore, a major combinatorial problem and exactly the type of optimization challenge that quantum computing aims to be able to address. In this way, the partnership with Pasqal and USA Rare Earth is a natural fit—Pasqal will provide the quantum machine learning and optimization algorithms, USAR will offer the environment to test and validate the results, and Riven Systems will be responsible for aspects of the chemistry involved in creating the solvents themselves.
Potential Benefits to Pasqal and USA Rare Earth
The success of this partnership could yield significant benefits for all participants and in particular the two publicly traded companies. First, improved separation chemistry would mean reduced chemical consumption and energy use for USAR, helping to drop operating costs, waste production, and more. It may also mean improved outcomes and final products.
Second, for Pasqal, this could be a validation of its neutral-atom quantum technology, demonstrating a real-world application with tangible value for customers in the rare earth mining industry. Though Pasqal is not getting into mining, it could position itself as a go-to resource for these firms, helping it establish a critical customer base at a time when all quantum firms seem to be competing for clients.
Beyond this, rare earth minerals are also very important to quantum tech, serving as components in quantum memory research, photonic systems, lasers, magnets, and other hardware vital to quantum computing.
Pasqal's Financial Situation Remains Murky for Investors
Despite the promise of this rare earths partnership, Pasqal remains a financially murky and highly speculative investment. The company has yet to report earnings since going public in August, and its very limited trading history makes it difficult to assess the stock's performance (although it is down about 24% since its IPO).
Compared to other quantum firms that have extensive analyst attention and ratings, Pasqal only has two ratings across Wall Street. Still, both of them—from Canaccord Genuity and Roth Capital—are highly optimistic Buys that also predict substantial share price appreciation.
The demand for a domestic rare earth supply chain is significant, even if it is limited by the naturally occurring resources in this part of the world. If Pasqal can help streamline that industry, it could add real value for a number of companies in rare earth mining and processing, as well as across other industries that rely on those elements. For the time being, though, investors should keep in mind that this still represents quite a risky bet on a new technology offered by a provider largely untested in the public markets.
The article "Quantum and Rare Earths? Implications of the Pasqal/USAR Partnership" first appeared on MarketBeat.
