The two companies will each receive grants from the US Defense Advanced Research Projects Agency (Darpa) to develop the machines. Cray will receive $250m and IBM $244m.
The grants were given for the third phase of the High Productivity Computing Systems Programme (HPCS) to produce a supercomputer capable of performing at four petaflops.
Such a machine would be roughly 14 times faster than IBM's BlueGene/L supercomputer, which is currently the fastest in the world at 280.6 teraflops.
The first HPCS supercomputers are scheduled to be delivered in 2010. The machines will initially be made available to government agencies for security and research programmes including nuclear weapons simulations.
Darpa hopes eventually to make the supercomputers available to research and commercial organisations as well.
Cray will set out to build a system dubbed 'Cascade' that is powered by AMD Opteron processors.
The system will focus on scalability and programming efficiency, allowing the supercomputers to adapt to various applications and projects.
"Cray will develop a new hybrid system architecture that combines multiple processor technologies, a new high-performance network and an innovative adaptive software layer into a single integrated system," said the company.
IBM plans to use its Power7 processor line and Advanced Interactive Executive operating system for its supercomputers.
The company said that the systems will not be specially made for this project, but will serve as the prototype for future IBM systems.
"We are not here to build a one-time wonder," said Elmootazbellah Elnozahy, IBM's programme manager for the project. "This is about changing the way mainstream systems are built."
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