Where traditional computers rely on silicon chips that work from a foundation of ones and zeroes, quantum computers use “qubits” that can be in both states at once.
Proponents believe that will make the technology hugely influential in critical fields such as artificial intelligence, cybersecurity and medical research.
But qubits are highly unreliable and unstable, meaning there are no quantum computers in commercial use today despite them being in active development for more than two decades.
Despite the challenges, the field is crowded with companies, including tech giants Google, IBM and Microsoft, trying to be the first to create a useful quantum computer. Many have state support.
Prime Minister Anthony Albanese, who will formally announce the investment on Tuesday in Brisbane, said the government was serious about building a quantum industry here.
“We need to make bold investments today if we want to see a Future Made in Australia,” Mr Albanese said in a statement.
The government believes the funds will create up to 400 highly skilled jobs directly. But Queensland Premier Steven Miles said the investment would spur a larger opportunity.
“Quantum will bring billions in economic opportunity to Queensland, which will deliver thousands of high paying tech jobs and the chance for Queenslanders to work in careers that will change the world,” Mr Miles said.
The government’s investment in PsiQuantum dwarfs its previous support for other Australian quantum companies, including former Australian of the Year Michelle Simmons’ Silicon Quantum Computing.
Professor Simmons’ company last year raised $50 million at a valuation of $195 million.
Mr Albanese has repeatedly visited the political battleground state of Queensland to spruik his Australian-made agenda, most recently a fortnight ago when he announced $400 million in loans for an alumina company.
PsiQuantum, which counts Australian professors Jeremy O’Brien and Terry Rudolph among its four-man founding team, plans to build an “error-corrected” quantum computer by 2029.
Professor O’Brien, PsiQuantum’s chief executive, reaffirmed that timeline “absolutely”.
Unlike many of its rivals, PsiQuantum’s technology is based on light rather than matter, which means it does not need to be kept nearly as cold as other quantum systems.
But it still needs to be close to absolute zero to work. Last year it signed a partnership with the US Department of Energy to develop advanced fridges for its devices, which need to run at ultra-cool temperatures, putting it ahead of some rivals.
The company already has a test cabinet, similar to one big computer cabinet in a server, operating in the United Kingdom while another is being installed in Stanford. Many cabinets will have to be joined together for PsiQuantum’s computer to work commercially.
From left, Jeremy O’Brien and Terry Rudolph.
China’s technology champions Alibaba and Baidu both pulled out of developing quantum technology over the summer, handing their work to state-run research institutes.
It was not clear whether that represented a loss of faith in the technology or a desire by the Chinese government to have tighter control over it.
At a Senate estimates hearing in February, bureaucrats from the Department of Science, Industry and Resources confirmed that it had approached 21 companies for information about their quantum offerings.
That process, first reported by industry site Information Age, was tightly bound in confidentiality agreements.
Science Minister Ed Husic said that had fed into a cabinet process with involvement from the country’s chief scientist, which led to selecting PsiQuantum.
“They’ve met their milestones,” Mr Husic said, adding that the Commonwealth’s investment was dependent on PsiQuantum hitting various goals.
PsiQuantum last disclosed a funding round in 2021, when it announced it had received $US450 million in investment from funds including BlackRock at a valuation of $US3.15 billion.
Mr Husic said the government had invested at around that number, which he said would likely change in an upcoming new funding round from private capital, while PsiQuantum declined to give an updated valuation.
Microsoft’s venture capital fund is an investor, as is Australia’s Blackbird Ventures.
Mr Husic defended the government’s decision to invest, rather than leaving it to the private sector to determine the best companies in the sector, by saying that the government had seeded the ground by investing in research and education in the field.
“We’ve got this moment and all this talent and all this capability,” he said. “And we’ve got firm saying we want to work with Australia and make this [industry] a reality.
“We just don’t want to repeat the sorry chapters of generations prior [when Australian governments declined to invest in technology industries like computer chip making].”
Sources familiar with matter have told The Australian Financial Review that Blackbird had invested in PsiQuantum since its 2021 round and had told its backers that making new optical switches was the company’s next step before making commercial systems.
“We’ve now pretty well knocked that one over,” Professor O’Brien said of the switch challenge, confirming Blackbird’s investment.
As part of the government’s investment in PsiQuantum, the company will operate successive generations of its computer in Brisbane, start a climate research centre, and partner with local suppliers and universities.
The 400 planned new staff will be in addition to PsiQuantum’s 280 staff globally.