Australian Government’s Big Investment on PsiQuantum Bypassed National Quantum Advisory Committee

Insider Brief

• The National Quantum Advisory Committee did not weigh in on Australia’s investment in PsiQuantum.
• The committee of Australia’s leading science and business leaders meant to advise the government on its national quantum strategy was not consulted before the decision, InnovationAus.com is reporting.
• The government defended the investment saying it underwent “technical, legal, commercial and probity assessments” by federal and state governments.

A committee of Australia’s leading science and business leaders meant to advise the government on its national quantum strategy was not consulted before the decision to invest about $600 million (US) in Silicon Valley-based quantum computing company PsiQuantum, InnovationAus.com is reporting.

The National Quantum Advisory Committee (NQAC), appointed in September 2022 to help coordinate Australia’s quantum capability across research, industry and government, did not provide any input on the $940 million (AUD) investment proposal from PsiQuantum. Nor was the 15-person committee, led by chief scientist Cathy Foley, made aware of the government’s secretive process to issue a call for expressions of interest from 21 local and international quantum firms last August.

According to multiple industry sources cited by the business outlet, the NQAC had no involvement in designing the expression of interest (EOI) process, which provoked an outcry among local companies claiming it favored the photonics-based approach being pursued by PsiQuantum. That approach uses photons rather than electrons to represent quantum bits or qubits.

The EOI is seen as the government testing the waters before handing PsiQuantum the investment in the form of equity, loans and grants in exchange for the company establishing its Asia-Pacific headquarters and attempting to build a quantum computer in Brisbane.

“The NQAC did not provide input on the proposal and was not told that federal and Queensland governments were going ahead with the investment that potentially makes PsiQuantum one of the highest funded quantum companies,” InnovationAus.com reported.

The committee’s members span federal agencies like Commonwealth Scientific and Industrial Research Organisation (CSIRO) and Defence, local quantum firms like Silicon Quantum Computing and Q-CTRL, groups like the Business Council of Australia, and academia. Venture capital firm Blackbird Ventures, an investor in PsiQuantum, also has a seat.

Blackbird’s general partner Michael Tolo praised the PsiQuantum deal as “a stunning nation building milestone that entrenches our position as the global leader in quantum computing.”

A spokesperson for Industry and Science Minister Ed Husic referred questions about NQAC’s advice to the Industry department, which did not respond, InnovationAus.com reported. Husic defended the “strategic investment” in the frontier technology, saying it underwent “technical, legal, commercial and probity assessments” by federal and state governments.

However, the government has not released its business case, economic impact analysis or technology assessment for the bet on PsiQuantum. The split between equity, loans and grants was also deemed “commercial in confidence.”

Husic likened the PsiQuantum deal to the previous government’s multi-billion dollar partnership with vaccine maker Moderna. As InnovationAus.com previously reported, both federal and Queensland governments had high-level talks with PsiQuantum since at least 2022.

The federal Industry department has not named the 21 companies approached in last year’s EOI process, over three months after being questioned by Liberal senator Andrew Bragg.

Shadow science minister Paul Fletcher criticized the “obsessive levels of secrecy” around the PsiQuantum investment and plans to use “all appropriate parliamentary channels” to determine how it was approved, according to InnovationAus.com.