The announcement of a partnership between quantum computing company PsiQuantum and the Australian government has been the biggest topic of the day. And I assume will be for weeks ahead given the hyperbolic headlines of “one billion dollars” at stake.
I’ve gotten a lot of emails asking about this so I’m putting some thoughts in here to save myself from retyping them. I always prefer to point people more qualified technical experts in terms of technical due diligence, but given my commercial quantum experience, and experience working with state and federal governments around innovation and capital expenditure, I feel comfortable saying the following.
Short response#
This deal will get a lot of attention given the overall size of the potential funding at play. Which almost certainly means that it will be widely misreported, used in political point scoring at the federal and state levels, and trigger some vocal backlashes from the domestic industries that will use the deal size of a frontier technology as a useful narrative device when furthering their own requests for support or backing.
Longer points of interest#
This is all well and good and to be expected. But what’s really interesting to me is that we see the following:
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PsiQuantum has effectively priced the market for other quantum and Deep Tech companies.
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PsiQuantum’s ability to navigate government funding deals in the USA (per a proposed Chicago site) and now Australia (for a proposed Brisbane site) indicates an incredible ability to close some of the hardest deals imaginable. This is worth studying and learning from.
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As an extention to the above, this also highlights the active engagement of the various federal and state trade and investment teams. I know some of these personally and they are impressive and dedicated humans let alone valuable public servants. Use this as a good reminder to engage with them.
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The media coverage will range from lazy ledes to outright provocation. Social media discourse will be borderline unbearable. This is frustrating (as the prevailing narratives affect the rest of us in the industry) but is just the nature of things these days. Product and marketing teams should be studying this news cycle and adapting their go-to-market and PR strategies to better control key talking points. For example…
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While the exact terms of the deal are not disclosed, the press release is clear that the Australian federal and Queensland state government are matched in a potential $470 commitment of a mix of “grants, loans and share purchases”. This much is clear, and yet we will see weeks of debates around “Australia gives one billion dollars to American quantum computing company”. There’s almost certainly some interesting tranches and conditional milestones here to explore.
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Domestic companies will have the opportunity to “complain or campaign”, in terms of choosing how to react. Savvy operators will use the fact that PsiQuantum has priced the market to promote their own unique advantages, engage with the international attention (both media and capital/VC), and build on the momentum.
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Industry representative bodies will almost certainly take the approach of questioning the transparency of the deal, and push for wider funding opportunities for more local and domestic vendors.
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Public discourse will be noisy, but the real conversations to be had are around the state and federal views around key technologies in terms of sovereign capabilities, Australia’s participation in arrangements such as AUKUS, etc. Which is about all I need to say on that topic.
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This deal is interesting as an indication of the path that companies like PsiQuantum are taking in pursuing fault-tolerant quantum computing directly. Other companies that come to mind are Australia’s Diraq, which is also skipping the iterative commercial release strategy and point directly at a long horizon of R&D. This differs to the “Generation One” quantum companies like Rigetti, IonQ, D-Wave and even Zapata who used a SPAC to backdoor list on the public markets (and I predict at least one of these is likely to delist before 2024 is over).
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As a final note, the site that PsiQuantum is likely to base their operation in Brisbane is an interesting one, and given Brisbane’s future as the host of the Olympics in 2032, there’s going to be some interesting developments in and around this deal. The PsiQuantum founders themselves were a part of Brisbane’s University of Queensland, and UQ’s involvement in the quantum industry is likely going to expand as funding and collaborative opportunities increase.
TLDR? A rising tide can float all boats, and working out how this particular boat managed to navigate the challenging waters of funding and sovereign collaboration will be useful for anyone else attempting to do the same.