The federal and Queensland governments have officially signed the near-$1 billion contract with US firm PsiQuantum, as newly released documents shed some light on the process leading up to the major deal.

It was announced earlier this year that the federal and Queensland governments would be inking a $940 million deal with PsiQuantum for the American firm to attempt to build the world’s first utility-scale quantum computer in Brisbane.

This contract has now been officially signed, with the federal government’s portion of the funding to include a $189.5 million equity investment by the Commonwealth, according to the Australian Financial Review.

It comes as newly released documents reveal the expression of interest (EOI) that the federal government issued to the local quantum sector last year, at the same time it was already in high-level discussions with PsiQuantum.

This EOI was issued to “explore the maturity of the market around quantum computing”, with 21 companies completing the process.

The actual EOI issued to Australian companies has now been made public following a Freedom of Information Act request by former Senator Rex Patrick.

Bound by secrecy

The EOI reveals that all respondents were bound to secrecy about its very existence and were not told anything about the fact the federal government had already entered into serious discussions with PsiQuantum to bring the company to Australia.

The EOI was issued in August 2023, the same month that PsiQuantum representatives met with the then-Queensland Premier and participated in a Queensland quantum advisory meeting late last year.

At the same time the federal government was seeking information from the quantum industry on the potential of building a fault-tolerant computer by 2030, the federal government was in non-binding commercial discussions with PsiQuantum and had recently kicked off due diligence on the US company.

The FOI reveals that none of this information was provided to respondents to the EOI.

The EOI related to “building the world’s first error-corrected quantum computer in Australia” and sought interest and capability in the local and global sector to do this by 2030, or earlier.

“Proposals will be considered by the Australian government to assist the Australian government in making decisions in relation to developing, building and operating a commercial-scale universal fault tolerant quantum computer in Australia, and delivering associated benefits to strengthen Australia’s quantum sector and contribute to the national interest,” the EOI said.

The EOI did state that the Industry department may approach other firms not part of that process, and may conduct other activities, future procurement or grant processes.

Through the EOI, a number of Australian companies provided information on their technology IP and readiness scale, evidence of milestones already met, capability, justification for an estimated build date and demonstrations of the processes, pathways and investments they are taking to meet this.

The newly released documents also reveal the federal government’s objectives with acquiring a quantum computer, including to “accelerate the development of world-leading quantum computing capabilities in Australia”, to strengthen the local sector and to “support initiatives that enhance domestic and international links with strategic partners in the national interest”.

PsiQuantum discussions

PsiQuantum was not involved with this EOI process, and the Industry department had already created a dedicated government taskforce to conduct due diligence on the company.

In 2019 PsiQuantum approached the federal government with an unsolicited proposal, but it wasn't until late 2022 that this engagement was stepped up.

The Industry department began to conduct due diligence on the firm in the first half of last year, and in June 2023 the taskforce was created.

This all took place before the waters were tested with the local quantum sector through the recently released EOI.

The May federal budget revealed that $2.5 million will be spent per year to manage the contract with PsiQuantum, with a total of $27.7 million allocated.

As part of the deal, PsiQuantum will be basing its Asia-Pacific headquarters in Brisbane and plans to have built the computer by 2027.