Quantum computing company IonQ said on Monday that it will buy cybersecurity company Elisity in an all-stock deal worth up to $1.3 billion, CNBC and The Wall Street Journal reported.

The deal includes up to $150 million in performance-based earnouts, CNBC reported. The deal is expected to close in the fourth quarter, if regulators approve. Elisity will keep its current leaders, including CEO James Winebrenner.

The companies said the deal is meant to defend against attackers who target AI systems, and to protect against new threats from quantum computers, CNBC reported. IonQ CEO Niccolo de Masi told The Wall Street Journal the deal is a bet that cybersecurity will matter even more as quantum computing and AI grow more powerful.

"This means that we can protect not only critical infrastructure — we believe better than anyone in the world — but of course the Fortune 500," de Masi told CNBC.

He warned about "Q-Day," the point when quantum computers can break today's standard encryption. "Frankly, people are not ready," he told CNBC.

Investors did not cheer. IonQ shares fell more than 9% in afternoon trading on Monday, CNBC reported. Other quantum computing stocks, including Rigetti Computing and D-Wave Quantum, also fell.

IonQ has been on a buying spree. In July, it bought chipmaker SkyWater Technology for $1.8 billion, CNBC reported. It has also bought several quantum companies, including UK startup Oxford Ionics.

The deal follows two White House executive orders in June. One aims to build a quantum computer for research by 2028, and another to protect government systems from cyber threats, CNBC reported.

What we know: IonQ plans to buy Elisity in an all-stock deal worth up to $1.3 billion, closing in the fourth quarter.
What we don't: Whether regulators will approve the deal, and how investors will judge it over time.