The Opposition has raised “serious questions” over the federal government’s funding of a US-based quantum computing company, while industry bodies have welcomed the move but called for further support for local firms.

The federal government earlier this week revealed it would be teaming up with the Queensland government to provide $940 million for California tech firm PsiQuantum to establish its Asia-Pacific headquarters in Brisbane and base its attempts to build the world’s first utility-scale quantum computer at Brisbane Airport.

The funding, which will be split evenly between the federal and state government, will be in the form of equity, grants and loans.

The announcement ended six months of speculation over the federal government’s plans to purchase a quantum computer which had been shrouded in secrecy.

Plans to purchase a quantum computer were first revealed by Information Age in November last year.

It was recently confirmed that the Industry department issued an expression of interest in August last year to “explore the maturity of the market around quantum computing”, with more than 20 companies approached as part of the “exploration process”.

In response to the funding announcement, the federal Opposition went on the offensive, criticising the process beyond the awarding of the near-$1 billion and the decision to back a single US company rather than local Australian firms operating in the quantum space.

Shadow Minister for Science Paul Fletcher labelled it a “very poor process facilitated in a secretive manner and lacking in competitive rigour”.

“There are serious questions Labor needs to answer about why there was no open, publicly announced, transparent expression of interest process to choose a company to receive this significant amount of taxpayer money,” Fletcher said.

“To allocate such a large amount of funding through a secretive process with only a handful of participants is a very curious way to proceed.”

Fletcher also raised concerns over the huge investment going towards a US-based company rather than a local firm.

While PsiQuantum was founded by two Australians, it is based in California.

“Everyone who cares about the vigorous and diverse Australian quantum computing sector, which contains multiple world-leading Australian-based researchers and companies would wonder what signal this sends to current and potential domestic and international investors,” he said.

“The Australian government has just chosen to allocate a large amount of funding to a foreign-based quantum computing company rather than any of the outstanding locally-based quantum companies and researchers.

“It would be a tragedy if this decision by the Albanese Labor government ends up making it more difficult for Australian-based quantum companies to compete for global investment because of a perception that their own government doesn’t believe in them.”

PsiQuantum has also already received about $1 billion ($US665 million) from a range of investors, including BlackRock, Baillie Gifford and Microsoft’s venture fund.

It has also received support from the US government in the form of a Defense Advanced Research Projects Agency (DARPA) grant, and more than $17 million (9 million pounds) from the UK government to establish an R&D facility.

Industry welcomes the funding

In contrast to the Opposition’s concerns, a number of tech industry groups have welcomed the government’s announcement but called for further support for local companies and other tech sectors.

The Australian Academy of Technological Sciences and Engineering backed the funding, with its CEO Kylie Walker saying it would “supercharge” research, infrastructure, talent and business activity in quantum.

“[This] investment in PsiQuantum and the research, technology and manufacturing industry that will grow around it will enable the Australian quantum industry to become an international leader,” Walker said.

The Australian Information Industry Association (AIIA) also welcomed the announcement but called for similar support for artificial intelligence companies.

“[This] announcement shows what is possible when governments put their minds towards supporting critical ICT innovation that in turn supports productivity across the entire economy,” AIIA CEO Simon Bush said.

“We now call on the Albanese government to make meaningful and significant investments in artificial intelligence commercialisation, research and adoption across the Australian government.

“While the rest of the world invests tens of billions, the Australian government has committed only $41 million to date.”