Guest Post: Is Australia Leading The Way in Quantum With Its Deliberate Bet on Manufacturing Economics?
Guest Post by Dr. Kris Naudts, Zeynep Koruturk and Donald Harmitt @ Firgun Ventures.
Firgun Ventures is a VC firm investing in Series A/B quantum scale-ups globally.
Australia’s quantum reputation has rested for a quarter of a century on world-leading quantum research talent, exemplified by the likes of Michelle Simmons, CEO of Firgun Ventures’ portfolio quantum computing company Silicon Quantum Computing, who was awarded Australian of the Year in 2018. Australia is now attempting to solidify its stronghold within something deep tech typically finds difficult: large-scale commercialisation. The shift changes what success looks like, and the country is no longer content to produce just excellent physics. Australia wants to produce companies, supply chains and exportable capability, and is prepared to put public capital directly behind this.
The ambition was formalised in the 2023 National Quantum Strategy, which set the goal of making Australia a global quantum leader by 2030. The numbers are substantial to say the least. More than $1.6 billion in sustained public investment has given the country the world’s fifth largest quantum workforce, over 40 companies spanning sensing, communications and computing, and 26 specialised research institutions. What distinguishes the approach is less the scale of spending than its shape. Rather than concentrating on a single technological pathway, Australia is cultivating domain breadth, and rather than funding research and stepping back, the government is increasingly acting as a direct equity investor.
Australia’s deliberate bet on manufacturing economics
The logic becomes quite clear in the quantum computing domain, where Australia’s two leading homegrown contenders, Silicon Quantum Computing (SQC) and Diraq, are both pursuing silicon-spin qubits, one of the five main quantum computing hardware systems currently, built with standard semiconductor processes. This is an asymmetric bet that the qubit race will be won not on headline qubit counts as many believe, but on manufacturing economics, where the semiconductor industry’s accumulated trillions in research and development become a competitive advantage other modalities cannot easily contest.
Founded in Sydney, Diraq is developing utility-scale machines using silicon technology compatible with existing chip fabrication, aiming to scale to millions of qubits on a single chip. The commercial signal arrived in February 2026, when Diraq secured a $14 million equity investment from Australia’s National Reconstruction Fund Corporation (NRFC), a $15 billion fund established to rebuild Australian industrial capability, intended to support a system capable of genuine quantum advantage by 2029 in Diraq’s case. The validation went further in May 2026, when Diraq signed a letter of intent for up to $38 million from the U.S. Department of Commerce under the CHIPS programme, part of a $2 billion package across nine quantum companies. The fact that an Australian firm should draw on U.S. industrial funding at the very moment Washington is placing its own large quantum bet is a notable outcome for the Australian quantum ecosystem.
SQC, meanwhile, is advancing commercial-scale processors using its proprietary PAQMan process, which lets it design, produce and test new chips in under a week. The National Reconstruction Fund has invested $20 million to support the scaling of its processing units, and is another contender to achieve commercial-scale, fault tolerant quantum computing by 2033.
The most intriguing case, and the one that invites the sharpest scrutiny, is PsiQuantum. PsiQuantum is a U.S. company, headquartered in Palo Alto and founded by expatriate Australian physicists whose photonic approach, another hardware quantum computing approach, traces back to the University of Queensland. Its billion-dollar project near Brisbane Airport, intended to house the world’s first utility-scale quantum computer, is backed by roughly A$940 million from the Australian and Queensland governments through a mix of equity, grants and loans. This is an example of sovereign-capability building staked on a foreign-headquartered firm, and it raises a fair question that diversified state investment cannot avoid, which is whether the returns, financial and strategic, will justify the uncommon arrangement.
Australia’s sensing bet is robust and diversified
If computing is seen as the slightly longer commercial play, sensing is where Australia is already generating commercial momentum, and it is here that the breadth of the national bet pays off. Q-CTRL is one of the standout startups within this domain. The company delivers AI-powered infrastructure software that accelerates progress on platforms such as IBM Quantum, and it raised one of the world’s largest quantum Series B to date at $113 million. In 2025, DARPA awarded Q-CTRL contracts under the Robust Quantum Sensors programme, with Lockheed Martin as subcontractor. The performance claim is notable newsworthy, given its Ironstone Opal system outperformed a high-end inertial navigation system in flight, achieving up to 111 times greater positioning accuracy when GPS was unavailable, validated in maritime trials aboard a Royal Australian Navy vessel.
The Australian quantum sensing ecosystem depth extends well beyond a single name. In Sydney, DeteQt is commercialising diamond-on-chip magnetometers that operate in GPS-denied environments, opening a market for magnetic intelligence across navigation, mineral exploration and medical imaging. Over in Adelaide, QuantX Labs has developed TEMPO, a next-generation optical atomic clock offering an order-of-magnitude improvement over current satellite-navigation clocks, the precision timing that quietly underpins radar, satellite synchronisation and telecommunications, and has been in orbit aboard the SpaceX Transporter-16 (a dedicated small satellite ride-share mission). Taken together, alongside other notable sensing firms such as Quantum Brilliance, a company building room temperature diamond-based quantum chips and high-performance magnetic sensing products, these companies show that Australia’s sensing bet is not riding on one technology or one firm, but on a spread of near-term capabilities that are already finding defence and commercial customers.
When The State becomes a Quantum shareholder
The thread connecting these companies is a sovereign financing model that is making significant waves within Australia’s quantum industry. The National Reconstruction Fund Corporation (NRFC) has become the government’s primary instrument for taking equity stakes in quantum technology startups. Beyond Diraq and SQC, NRFC has invested in Quantum Brilliance to build Australia’s first diamond-based quantum foundry and in QuintessenceLabs to advance quantum-resilient cybersecurity.
When a state moves from awarding grants to holding shares, it shows overwhelming confidence through underwriting an industry while accepting downside exposure in exchange for sovereign capability. Grants reward good science regardless of commercial outcome, while equity ties the taxpayer’s return directly to the company’s success, aligning incentives and giving the state a genuine stake in the value it helps create.
The collaboration dividend
Australia’s final advantage is that it is not building alone. Under Pillar 2 of AUKUS, its trilateral pact with the United Kingdom and the United States, the three partners coordinate joint development of interoperable military technology, with quantum a named priority. The government has also signalled plans to co-invest with venture investors for total funding of up to A$1 billion in defence and dual-use technologies spanning quantum, cyber, AI and autonomous systems. Underpinning all of this is talent, which is a wider global bottleneck affecting even leading quantum nations. With CSIRO projecting 19,400 quantum jobs in a A$6 billion domestic industry by 2045, a deep pipeline of skilled people may prove the most durable competitive advantage of all.
What Australia is testing is a thesis as much about capital structure, as about physics. The country has decided that diversification across the quantum technology stack, combined with the state acting as an active shareholder rather than a passive funder, is the surest route from world-class research to commercial scale. Whether it holds will be settled by whether public equity can stay patient long enough for an industry to mature. The rest of the quantum world should be watching closely to see if it can.
Image: Photo by Jay Wennington on Unsplash