Quantum EoI process raises ‘serious questions’: Paul Fletcher

James Riley
Editorial Director

The federal government would have “significant questions to answer” if it were to move ahead with an investment into a US quantum company based on a highly unusual and secretive procurement process, the manager of Opposition business in the House Paul Fletcher has warned.

The government made a quiet approach to a select group of local and foreign quantum companies in August seeking information about their technology as part of a plan to underwrite the early acquisition of a full-stack, error-corrected quantum computer.

Companies that responded to the call for expressions of interest have been bound by unusually tight non-disclosure agreements, keeping the entire procurement process out of sight.

But local quantum companies hit the alarm button on the EoI process last month, claiming privately that the EoI document appeared to favour a technology being pursued by US-based startup PsiQuantum.

That makes PsiQuantum the front-runner for an investment by the Australian government thought to be in the range of $100 million to $200 million.


An investment of this size, into a single quantum company that is pursuing just one of many promising technical tracks, has been described to InnovationAus.com as “radically risky” and “crazy”.

Paul Fletcher, who is shadow minister for Government Services and the Digital Economy, as well as shadow minister for Science and the Arts, says he is seeking further information about the procurement process behind the “rumoured” investment.

He says the process is potentially damaging to Australian quantum companies, harming their ability to raise money in future, or even find customers.

If the purpose of the secretive process was to assess what technology is available to the Australian government, and then having made an assessment of local and foreign companies the government decides to make a single large investment into a foreign company, it sends a powerful and negative signal to investors about the Australian companies that were passed over, Mr Fletcher said.

The EoI process is understood to have been managed by a taskforce within the Industry department.

The Industry department did not respond to queries from InnovationAus.com. Industry minister Ed Husic’s office acknowledged it had received email queries from InnovationAus.com, but said it was up to the department to respond.

“There are strong rumors across the industry, that the government is considering making a significant investment into PsiQuantum,” Mr Fletcher said.

Based in San Francisco, PsiQuantum was co-founded by – ironically – an Australian with a PhD in quantum physics from the University of NSW.

“If this [were to] have happened, there would certainly be questions as to the basis on which that investment decision was made, and the process that was involved in making that decision,” Mr Fletcher said.

“There’s also real and serious questions as to the impact that this might have on investor confidence amongst prospective investors in Australian-based [quantum] companies.

“[These investors] might very well ask themselves the question: ‘Why would the Australian government put money into an offshore quantum company rather than a domestic court quantum company?’

While the process behind the accelerated procurement of a working, error-corrected quantum computer is understood to have been managed through the Industry minister Ed Husic, he is thought to have had support in Cabinet for the proposal from the deputy prime minister and Defence minister Richard Marles.

PsiQuantum was founded by Australians Jeremy O’Brien and Terry Rudolph in the US. The company has a stated mission to mission to build the “world’s first useful quantum computer”.

The company said in September it expected to deliver the first fault tolerant, error-corrected quantum computer within six years.

Industry minister Ed Husic visited the PsiQuantum headquarters in the US in January. The company registered an Australian office in Brisbane in April this year.

Raising eyebrows among local quantum companies has been the revelation that newly-established Canberra lobbyists Brookline Advisory had been acting on behalf of PsiQuantum since May.

One of Brookline Advisory’s co-founders is former Labor staffer Lidija Ivanovski, a former chief of staff to Defence minister Richard Marles until mid-2022, and who was chief of staff to the Labor election campaign at the 2022 federal election.

Also acting for PsiQuantum, according the federal Register of Lobbyists, is Akin Agency’s Brisbane-based government relations specialist Alexander Dickson. Akin Agency landed in the lobbyists register in mid-November, shortly after the first media reports about the ‘secret’ EoI were published.

Meanwhile Paul Fletcher has also been highly critical of government plans announced on Monday to spend $18.5 million to establish an Australian Centre for Quantum Growth, saying that right now the money would be better spent supporting Australian research efforts.

“Australia has a globally competitive quantum sector and a number of companies who are doing world-leading work,” Mr Fletcher said. “The policy question really is ‘what should the Australian Government be doing to support that work?”

“The recent announcement that the government will put $18.5 million into the Australian Centre for Quantum Growth is rather hard to decipher,” he said.

“It looks like money essentially for industry promotion, like some kind of specialised Austrade for quantum.

“It would seem to be a much better use of that money to allocate in a competitive grant process to companies doing research in quantum to fund further research.”

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