PsiQuantum alone in due-diligence test

US firm PsiQuantum was the only quantum computing company the federal and Queensland governments put through a formal due-diligence process before inking a near $1bn taxpayer-funded deal.

Industry Minister Ed Husic. Picture: Martin Ollman

US tech firm PsiQuantum was the only quantum computing company the federal and Queensland governments put through a formal due-diligence process before inking a near $1bn taxpayer-funded deal to build a world-first fault-tolerant quantum computer in Brisbane.

Department of Industry, Science and Resources secretary Meghan Quinn told a ­Senate committee on Wednesday the first phase of the federal due diligence with PsiQuantum started in February last year, well before the rest of the market was tested.

A technology investment taskforce was only established in June, law firm King & Wood ­Mallesons was engaged in July for “non-binding, commercial-in-confidence” discussions with PsiQuantum, and a formal ­expressions-of-interest process to test the market with 21 other firms only launched in August, the estimates hearing heard.

PsiQuantum won $940m in taxpayer-funded grants, equity and loans in a secretive deal in late April this year. The deal has fuelled industry concerns the process was ­designed to favour the Palo Alto-based company, which boasts its technology – based on photons, or single particles of light – is the best way to build a commercial quantum computer. PsiQuantum has Australian-born co-founders.

Liberal senator Andrew Bragg asked department officials whether, mid-last year, Psi­Quantum had the “inside ­running” ­because it was the only company to have direct contact with King & Wood Mallesons through its own lawyers.

Technology investment taskforce leader Anthony McGregor responded: “We’d undertaken some initial due diligence.”

Labor’s Assistant Minister for Trade and Manufacturing Tim Ayres interjected, describing Senator Bragg’s characterisation of PsiQuantum’s treatment as “lazy, pejorative … both unfair and incorrect”.

But it was revealed that only PsiQuantum was subjected to due diligence. The expressions-of-interest process with the other 21 companies ran from August to September last year, before a ­decision was made to fund Psi­Quantum in February this year.

The department was required to test the market with other companies as was “consistent with commonwealth investment frameworks,” Ms Quinn said.

The Australian revealed last month that the federal and Queensland governments engaged Deloitte in February last year to analyse the validity of PsiQuantum’s project plan and business model, months before a formal expressions-of-interest process was opened in August.