Microsoft has ended its quantum computing research efforts in Australia, shutting down its quantum research facility at the University of Sydney after a seven-year partnership.

The tech giant this week confirmed that it would close Microsoft Quantum Sydney, which it has been running in collaboration with the University of Sydney since 2017, and relocate its quantum research and commercialisation efforts to its headquarters in the United States, as first reported by InnovationAus.

The university said many of the researchers involved in the quantum centre, including its head Professor David Reilly, would be staying in Australia to continue their work separately from Microsoft.

A Microsoft spokesperson told Information Age: “Organisational and workforce adjustments are a necessary and regular part of managing our business.

“We will continue to prioritise and invest in strategic growth areas for our future and in support of our customers and partners.”

A spokesperson for the University of Sydney also confirmed the closure and said it had been a “fruitful collaboration” with Microsoft.

“The university thanks Microsoft for its contribution progressing the quantum industry in Australia,” the spokesperson said.

"Microsoft Quantum Sydney has assisted students studying quantum science at Sydney [University] develop their knowledge and technical skills, contributing to the renaissance in quantum tech underway in Australia.

“The university and Microsoft enjoy a strong relationship and continue to work closely together on a range of projects, including the recently inked memorandum of understanding on artificial intelligence.”

Groundbreaking research

Microsoft Quantum Sydney was established at the University of Sydney’s $150 million Nanosciences Hub seven years ago, with an aim of making commercial quantum computers a reality.

In 2021 the team made a major breakthrough with the development of a chip able to control large numbers of qubits, the building blocks of quantum computers.

This is said to help solve the scalability problem that is currently facing the quantum computing sector.

It was led by Professor Reilly, who was a joint employee of Microsoft and the university.

He will be remaining in Australia to continue this research, along with members of his team.


(L-R) Professor David Reilly, University of Sydney Vice-Chancellor and Principal Dr Michael Spence, and Microsoft's Douglas Carmean and David Pritchard in 2017. Photo: University of Sydney / Jayne Ion

“We are delighted that [he] and team members from Microsoft Quantum Sydney laboratories have decided to remain in Australia and will collaborate with the vibrant and growing quantum ecosystem at the University of Sydney and across Australia,” the university spokesperson said.

“Professor Reilly is one of the world’s leading quantum technologists.”

The team will also work closely with the recently established Quantum Australia network, which will be based at the University of Sydney thanks to a near-$20 million Commonwealth grant.

The network will aim to strengthen connections between industry, research, consumer and government groups around quantum, and to act as a “single front door” for the sector.

Australia’s quantum push

The federal government has placed significant focus on growing the local quantum sector, with the release of Australia’s first quantum strategy in May last year, which aims to cement Australia’s position as a world leader in the industry.

While Microsoft is consolidating its quantum efforts in the US, a major American quantum player in PsiQuantum is bringing some of its capabilities to Australia thanks to a major public investment.

The federal and Queensland governments will be investing nearly $1 billion in PsiQuantum to bring the company’s efforts to build a fault-tolerant quantum computer to Brisbane.

This includes a $189.5 million equity investment from the federal government.

This deal has been shrouded in controversy, with concerns over the huge amount of funding going towards an overseas-based company, a legal contract that has ballooned in value and an approach to the local market made while the federal government was already in high-level discussions with PsiQuantum.

The Australian National University (ANU) earlier this month signed a memorandum of understanding with Japanese tech firm Fujitsu which it said would "drive local innovation and talent development" in quantum computing.

The deal will see Fujitsu provide the university's researchers and academics with access to its quantum technologies and simulators in Japan, with the aim of eventually establishing an on-site quantum computer at ANU.