Capital Brief - Opposition raises questions about PsiQuantum's $760m Chicago deal

PsiQuantum announced overnight that it will build a quantum computer in Chicago, securing US$500 million ($763 million) in incentives from state and local governments over 30 years. 

The announcement has prompted the Opposition to question the Albanese and Queensland governmentsʼ $940 million investment in PsiQuantum, which was intended to ensure Australia gets the worldʼs first commercially viable quantum computer. “This huge Chicago deal casts a very dark shadow over the Albanese Governmentʼs investment in Brisbane,” said Paul Fletcher, shadow minister for science. 

Fletcher questions whether Albaneseʼs cabinet knew about the Illinois governmentʼs interest when deciding on the PsiQuantum investment, and whether the intellectual property developed with Australian funding will benefit the Chicago project.

PsiQuantum noted its Australian plans are “unchanged,” with construction in Brisbane scheduled to begin next year and the facility
expected to be operational by 2027. The Chicago operation will lag behind Australiaʼs by about a year.“PsiQuantum says it will commit to building the worldʼs first fault tolerant quantum computer in Brisbane, but it's hard to imagine the Illinois government will want to play second fiddle to Queensland,” he said.

“The company is headquartered in America with the bulk of its resources there as well, so it seems much more likely that its priorities
and loyalty will remain there.” 

However, not all reactions have been negative. Stephen Bartlett, quantum physicist and director of the University of Sydneyʼs Nano
Institute, called the Chicago deal “positive.” One key reason for Australiaʼs investment was to deepen strategic ties with international
allies — a goal that having sister facilities in Brisbane and Chicago can help achieve. 

Quantum computers are capable of running algorithms that standard (or “classical”) computers cannot process. The promise of quantum computing technology lies in its cutting-edge processing abilities, which are hoped will spark revolutions in fields like drug discovery, engineering, cybersecurity and defence. 

Companies like IBM have already built quantum computers, but todayʼs models have limited power and are prone to errors. “Fault-tolerant” quantum computers, like the one PsiQuantum intends to build, will be many orders of magnitude more powerful and, as the name suggests, will perform more reliably.

The state of Illinois, Cook County, and the city of Chicago will spread the US$500 million in incentives over 30 years. Unlike Australiaʼs deal, which involved purchasing a small stake in the startup, the Chicago deal does not appear to include any equity in PsiQuantum. 

PsiQuantumʼs manufacturing facility will be set up at the Illinois Quantum and Microelectronics Park. Bartlett notes that it is significant the US Defence Advanced Research Projects Agency (DARPA) has also invested in the park and will be co-located there. 

“For us to have a company in Australia thatʼs integrated with that major US program is a positive thing,” he said. “You would want to be involved with something that involves our key alliesʼ biggest effort in that area [quantum computing].”

Department of Industry tender documents released in response to a Freedom of Information request from Capital Brief showed that the Commonwealth and Queensland governments were looking for a company that could achieve a commercial-scale quantum computer by 2030 and deepen strategic ties with international allies. 

“The Australian Government seeks to meet the following objectives,” the document reads before listing three goals. The first two concern building Australiaʼs quantum computing capabilities and developing the local sector. The third criterion is for the investment to “support initiatives that enhance domestic and international links with strategic partners in the national interest.

Author: Daniel Von Boom

This article appeared in Capital Brief on 26 July 2024