CAPITAL BRIEF - ‘Cloaked in secrecy’: Fletcher says Albanese must come clean on $b quantum bet

The federal opposition says Anthony Albanese needs to come clean on why a $1 billion funding commitment for Silicon Valley startup PsiQuantum was "cloaked in secrecy" after the Prime Minister revealed it was deliberated at the highest levels of cabinet.

In an exclusive interview with Capital Brief published on Monday, Albanese said his flagship Future Made in Australia policy was aimed at industries that were either a “comparative advantage” for Australia or there was a “national security reason” to back, and that the PsiQuantum deal “falls under both” categories. 

“On national security and those issues - there is, in this case, an example of a first mover advantage… If we get ahead of the pack, this is an extraordinary breakthrough that has the potential to have such a spin off for use across a range of other industries,” Albanese said.

He also said the process went through “many hours of many meetings, at every level of our cabinet processes, to make sure that it was the right thing to do”. 

Albanese and Queensland Premier Steven Miles last month announced the joint $940 million investment into PsiQuantum to build the worldʼs first commercially useful quantum computer in Brisbane by the end of the decade. The decision to go with the US-based company after a twoyear assessment of its photonic approach to quantum computing, which included an expression of interest process with other firms, but the process has been criticised by the federal opposition for being overly secretive. 

Opposition science spokesman Paul Fletcher told Capital Brief on Monday it was “troubling” that the Albanese government chose to bet a very large amount of money on one particular company, pursuing one particular technology path. 

“Simply saying this decision falls under comparative advantage and national security reasons isnʼt good enough,” he said of Albaneseʼs comments. 

“The Prime Minister needs to be honest with the Australian people about how this decision came about and why world leading Australian based quantum computing companies missed out on funding. 

“Australians deserve to know why this deal was cloaked in secrecy and followed a highly questionable process which failed to meet normal standards of transparency and contestability.” 

Fletcher said there was no public transparent expression of interest process to call for applications and only a small number of companies were invited to participate who were required to sign non-disclosure agreements.

“And the terms made it look like this had all been written so that PsiQuantum was going to be the winner,” Fletcher said. 

“Labor has refused to provide answers to the most basic and obvious questions about this deal, including how much of this money is a loan, how much is an equity investment and how much is a grant? What's the interest rate on the loan? Will the Australian government receive an ownership stake in the company? Will there be rights to the intellectual property that's developed?” 

Despite Albanese's statement that the decision went through rigorous vetting, the National Quantum Advisory Committee was reportedly not consulted. The announcement has also been questioned by rival startups operating in the emerging field who claim it is a huge bet on a single technology and a single foreign company. 

Michael Biercuk, founder and CEO of Q-CTRL, a Sydney quantum startup thatʼs raised US$52 million since being founded in 2017, said he welcomed the funding for PsiQuantum but it was not enough on its own to support a quantum industry. 

There were many different approaches to quantum computing, said Biercuk. He is calling for a $5 billion investment over five years to support a range of quantum companies which each use different technologies. 

“Whether PsiQuantum delivers as promised or not, it isn't possible to build a vibrant local industry through investment in just one foreign company,” he told Capital Brief. 

“The risk of departures abroad and local closures is real when private capital availability in Australia is known to be so much lower than in Silicon Valley

“Fortunately such potential negative outcomes are also very easy to offset through follow-on local investments… There is currently a strong Australian ecosystem of industry participants already on shore, any of whom could be the source of the next major advance.” 

Marcus Doherty, cofounder of Canberra-based Quantum Brilliance, told Capital Brief last week the government fell short of international standards by allocating such a large amount of funding without a public testing process. The government needs to invest at least $350 million in local startups if Australiaʼs ecosystem is to compete with PsiQuantum now that itʼs received $940 million in government backing, according to Doherty. 

A breakthrough in quantum computers, which can solve in minutes certain problems that take modern supercomputers decades, would have the potential to revolutionise pharmaceuticals, engineering, agriculture, cyber security and artificial intelligence.

In the interview, Albanese conceded the funding commitment for PsiQuantum was different to other government programs like the National Reconstruction Fund because the company could have set up “anywhere in the world”. 

“PsiQuantum would be in a position to go ahead somewhere. So itʼs a question of where. Itʼs as simple as that,” Albanese said. 

PsiQuantum is based in the US but it was founded by a group of four that includes two Australians. 

In an interview with Capital Brief on the day of the announcement, the companyʼs co-founder and CEO Jeremy OʼBrien, who was born in Sydney and raised in Perth, said he had exhausted all available technological possibilities over the past two decades before arriving at the conclusion that there was “no alternative” to the photonic approach to quantum computing adopted by his company. 

“From the 1990s, my conviction was that there ainʼt any other way to do it,” he said.

 

Authors: Anthony Galloway & Dan Van Boom

This article appeared in the Capital Brief on 14 May 2024