National quantum advisory body not consulted on $1bn deal

The hand-picked committee of eminent science and business leaders enlisted to provide advice to the Albanese government on the national quantum strategy were not consulted on the decision to invest almost $1 billion in California-based company PsiQuantum. can reveal the National Quantum Advisory Committee (NQAC) was not asked for advice on the $940 million investment and did not review the investment proposal submitted by PsiQuantum.

The NQAC was also initially not told that the federal government had embarked on a ‘secret’ call for expressions of interest to supply the world’s first commercially useful quantum computer.

The 15-person committee, led by chief scientist Cathy Foley, was appointed in September 2022 as part of a push to coordinate the nation’s quantum capability across research, industry and government.

The committee helped shape last year’s inaugural National Quantum Strategy – launched last May – in which the federal government first proposed building the “world’s first error-corrected quantum computer in Australia”.

Image: PsiQuantum

But multiple industry sources have said the advisory committee, which has representatives from government, industry and academia, had no say in the design of the EoI process before it was issued to 21 local and international quantum firms last August.

The EoI process provoked an outcry among local companies, which have claimed it was worded to favour the photonics-based quantum approach being pursued by PsiQuantum. The approach uses uses photons as a representation of qubits instead of electrons.

It is seen as an attempt by the federal government to test the market before handing PsiQuantum $940 million in equity, loans and grants, in exchange for it locating its Asia-Pacific headquarters and attempts to build a quantum computer in Brisbane.

Following the EoI, 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.

NQAC representatives span federal government agencies CSIRO and the Department of Defence, local quantum companies Silicon Quantum Computing and Q-CTRL, the Business Council of Australia and the University of Technology Sydney.

Australia’s largest venture capital firm, Blackbird Ventures, which invested in PsiQuantum as part of its US$450 ($688 million) Series D fundraising round in mid-2021, is also represented on the committee.

Blackbird’s general partner Michael Tolo lauded the investment in the company as a “stunning nation building milestone that entrenches our position as the global leader in quantum computing” following the near $1 billion announcement on Tuesday.

Blackbird is understood to have played a central role in lobbying the federal and Queensland governments on behalf of PsiQuantum.

PsiQuantum has engaged a total of three lobbying firms, including Brookline Advisory, which was set up by Defence minister Richard Marles’ former chief of staff, Lidija Ivanovsk, and former Labor staffer Gerard Richardson, and, more recently, Liberal-aligned CT Group.

The third PsiQuantum lobbyist is Akin Agency, which also works with Australia’s newest technology industry group, the Tech Council of Australia.

A spokesperson for Industry and Science minister Ed Husic referred questions regarding NQAC’s advice on the PsiQuantum investment to the Industry department, which did not respond to a request for comment in time for publication.

The government on Tuesday said the almost $1 billion bet would create tens of thousands of jobs through the “spillover” benefits of bringing the PsiQuantum – as well as others working in the field across the world – to Australia.

But the government has not made public its business case for the investment, or revealed whether it had conducted an economic impact analysis. It has also not released its assessment of the technology, or said who conducted the assessment.

The terms of the deal have also been suppressed, with Mr Husic on Tuesday saying the split of equity, loans and grants is “commercial in confidence” and has therefore not been made public.

Mr Husic defended the “strategic investment” in frontier technology that was preceded by “technical, legal, commercial and probity assessments” at both the federal and Queensland government levels.

He has likened the investment to the multi-billion dollar partnership with Moderna that was brokered by the former Coalition government — and supported by Labor — in December 2021.

As revealed by in January, both the federal government and Queensland government had been in high-level talks with PsiQuantum since at least 2022, with discussions accelerating last year.

Former Queensland premier Annastacia Palaszczuk and her chief of staff met with the company in August – the same month that the EoI was issued by the federal government and while the state’s quantum strategy was being developed.

The federal Industry department is yet to detail the names of the companies approached for the EoI more than three months questions were asked of its by Liberal senator Andrew Bragg at a Senate Estimates hearing.

Shadow science minister Paul Fletcher has criticised the federal government for its “obsessive levels of secrecy” over the deal and is planning to use “all appropriate parliamentary channels” to determine how the investment was made.

– with James Riley

Do you know more? Contact James Riley via Email.

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