(Corrects headline, lead paragraph to make clear the government is sponsoring wider research effort)
* IBM teams up with Fraunhofer Gesellschaft on research effort
* To host Q System One quantum computer in Germany
* Focuses include complex chemistry, artificial intelligence
* German government keen to close gap on cutting-edge research
By Douglas Busvine
FRANKFURT, Sept 10 (Reuters) - IBM is joining forces with a German research institute to explore the potential of quantum computing, as the government in Berlin backs research in the field to the tune of 650 million euros ($717 million) over two years.
The German government's backing, sealed at a meeting on Tuesday between Chancellor Angela Merkel and IBM CEO Ginni Rometty, comes as Europe's largest economy seeks to catch up to the United States and China in a global technology race.
IBM said it would install a Q System One quantum computer at one of its facilities in Germany, partnering with the Fraunhofer Gesellschaft - an applied research institute - to build a research effort and community around it.
Quantum computers could operate millions of times faster than today's advanced supercomputers.
The technology is based on quantum bits, or qubits, that can be 'superposed' on each other, exponentially increasing the amount of information that can be processed. IBM's current Q System One machine has 20 qubits.
"This effort is poised to be a major catalyst for Europe's innovation landscape and research capabilities," Martin Jetter, senior vice president and chairman of IBM Europe, said in a statement.
Developing viable quantum computers has proved to be hugely challenging because they rely on superconductivity that can only be achieved in a controlled environment in which temperatures are held close to absolute zero.
Any instability in the qubits can lead to "noise" that disrupts computing.
The IBM Q System One, launched in January, has so far been deployed primarily in a research setting but the company - which has branched into cloud computing and artificial intelligence - hopes to turn it into a commercial proposition.
Researchers will be able to access the quantum computer via the IBM cloud, with potential tasks ranging from mapping complex molecular structures and chemical reactions to making artificial intelligence more powerful.
"This partnership is a landmark quantum computing initiative and a crucial step forward for German research institutions as well as businesses of all sizes in our country," said Professor Reimund Neugebauer, President of Fraunhofer Gesellschaft.
Merkel's government last year said it would make available 3 billion euros to sponsor the research and development of artificial intelligence by 2025 as it seeks to regain ground in cutting-edge research. ($1 = 0.9060 euros) (Reporting by Douglas Busvine; editing by Emelia Sithole-Matarise)