Labor bets on quantum with $1 billion deal for PsiQuantum, Sydney Uni hub

The federal government is putting its money where its mouth is by investing millions of dollars to help a Silicon Valley quantum computing startup establish its regional headquarters in Brisbane, and selecting the University of Sydney to establish a national quantum computing centre.

Investing in quantum computing technology emerged as a key theme in the 2023-2024 federal budget, with the Labor government allocating $101.2 million towards advancing Australia’s capabilities in the area, along with other advanced technologies like artificial intelligence. This included the country’s first national quantum strategy, which was announced just ahead of the budget.

Some $18.4 million of those funds have been set aside to establish Quantum Australia, a national centre, Minister for Industry and Science Ed Husic announced over the weekend will be established at the University of Sydney.

The centre has been given a remit to “raise awareness of quantum technology, foster collaboration between industry and universities, encourage the creation and growth of more quantum startups, and connect quantum companies on a national and international scale”.

On Tuesday, the government doubled down on this focus on quantum tech, revealing it is teaming up with the Queensland government to invest $940 million in PsiQuantum, in a deal that will involve the Silicon Valley-based startup establishing its regional headquarters in Brisbane.

PsiQuantum was founded by Australian professors Jeremy O’Brien and Terry Rudolph, along with Dr Peter Shadbolt and professor Mark Thompson, in 2016 and has been working on building the first commercially useful quantum computing system.

Both governments will contribute $470 million to the startup, for a total investment of $940 million, in the form of share purchases, grants and loans, according to the Australian Financial Review.

The investment from the federal government forms part of its recently announced Future Made in Australia policy, which also includes a $1 billion pledge for the solar panel manufacturing industry, $1.5 billion for critical minerals projects and tax incentives to encourage international capital into the country.

In July 2021, PsiQuantum was reportedly valued at US$3.15 billion, after closing a US$450 million Series D raise, which was led by BlackRock and included Baillie Gifford, Microsoft’s venture fund M12, Australian VC Blackbird and Temasek.

The startup is working on building a fault-tolerant quantum computer that will have actual applications in the real world.

As SmartCompany reported at the time, PsiQuantum’s technology allows for single particles of light, or photons, to be patterned onto a silicon chip, which allows for fault-tolerant quantum computing and can be manufactured at scale.

Prime Minister Anthony Albanese is expected to formally announce the investment in Brisbane on Tuesday morning.

It is expected the investment will directly create 400 new jobs, in addition to the 280 staff employed by PsiQuantum globally.

Australia has an “edge” in quantum computing: Husic

Speaking about the establishment of Quantum Australia, Minister Husic said Australia already has runs on the board when it comes to quantum computing and the federal government wants to add to that.

Australia is home to a growing number of startups in the sector, including Silicon Quantum Computing, which raised $50.4 million in Series A funding, part of which came from the government, in mid-2023.

The likes of Diraq, Quantum Brilliance and Analog Quantum Circuits (AQC) have also raised millions in funding, while Q-CTRL partnered with TAFE in October 2023 to bring advanced quantum technology training to TAFE students across Australia.

“We want to make more things here and quantum computing will give us the technological muscle to do that,” Husic said in a statement.

“Australian researchers have been responsible for some of the most important quantum breakthroughs, so we have an edge in this critical technology.

“This investment and the government’s support of quantum is about sharpening that edge and making sure it delivers an economic return for Australia in the shape of new jobs in new industries.”