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RICK:

From Schwartz Media, I’m Rick Morton, This is 7am.

In high-security labs, from Silicon Valley to mainland China, researchers are racing to be the first to bring about what has been dubbed ‘Q-day’.

On that day, all encryption and security could be laid bare and the internet could essentially break. The deepest plans of militaries around the world, all of our medical records, and private encrypted conversations could be exposed.

That’s because Q-day is the day the most powerful machine ever imagined comes online, the first fault-free quantum computer, and no one knows whether it’s months or decades away.

Today, special correspondent for The Saturday Paper, Jason Koutsoukis, on why Australia wants to join the race and why one company got the billion dollar deal to do it.

That’s coming up, after the break.

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RICK:

Jason, Einstein thought some of the implications of quantum physics were downright spooky when he first heard about them, and it seems fitting that the global race to build a quantum computer on these theories is just as strange and compelling. What's the promise of the technology?

JASON:

It's a great question, Rick. I must say, I've always been interested in the idea of a quantum computer because you hear so much promise.

Audio Excerpt - 60 Minutes USA (voiceover):

“The quantum computer pushes the limits of knowledge, new science, new engineering, all leading to this processor that computes with the atomic forces that created the universe.”

JASON:

You know, these are incredibly fast machines that, you know, what we're told is that such a device, you know, like this could help address some of the world's biggest problems. You know, climate change, food security…

Audio Excerpt - Joe Rogan:

“If we think about what quantum computing is going to be capable of, that's the kind of stuff we're thinking about, right?”

Audio Excerpt - Dr Michio Kaku:

“Yeah. You see, quantum computers are the ultimate computers because they're competing on atoms. If there are aliens in outer space, and I think there are, it means that they also have perfected quantum computers.”

JASON:

And then, perhaps on a more negative side, these computers are so powerful that they could in a sense, you know, break the internet, crack all of the cryptography that we use every day to secure our data. Fundamentally, this is a world changing race to develop the world's first quantum computer.

Audio Excerpt - Dr Michio Kaku:

“We're looking at a race. A race between China, between IBM, Google, Microsoft, Honeywell.”

Audio Excerpt - News Presenter DW News:

“President Xi Jinping has said research and development in quantum science is an urgent matter of national concern, and the country has invested heavily in this technology. Spending billions in recent years…”

JASON:

You know, it's a race between the United States and China. You know, will the US or China get there first? Suddenly, it seems like Australia is in this race as well.

Audio Excerpt - Anthony Albanese:

“This is a quantum leap into the next generation of technology right here in Queensland…”

Audio Excerpt - Cameron Dick (Queensland Treasurer):

“For Queensland, this is our moonshot. For Queensland, this is our Project Apollo…”

JASON:

The guy leading this push is Ed Husic. He's the Minister for Industry and Science. He's also one of the government's best plain speaking communicators.

Audio Excerpt - Ed Husic:

“Current classic computing, it can do a lot. And I know there will be a lot of you that think that AI and computers at the moment can achieve a lot but they’re gonna hit a ceiling and quantum computing will break through that. Coming up with new ways to find new drugs, to help us in the transition to net zero...”

JASON:

And, Ed Husic says that, by betting $1 billion on this PsiQuantum company, which is based in California, that Australia is suddenly at the head of this race.

RICK:

Because that is what is at stake here, right? The government has announced that this Californian based company PsiQuantum is going to produce the world's first useful, useful quantum computer, right here in Brisbane. You know, just up the road from where I am now. What have they announced exactly? And why are they going overseas?

JASON:

So, what they've announced is that the Australian government and the Queensland government will invest almost $1 billion. It's going to be half from the Commonwealth and half from the Queensland Government. And that money is going to be a mixture of loans, and equity. So Australian taxpayers will actually have a stake in this company. In 2021, it was valued at about $5.5 billion Australian. So if they managed to build the world's first useful quantum computer in Brisbane, and it can do all the things that, you know, we hear about, then I think the value of that stake that Australian taxpayers own will increase in value.

Audio Excerpt - Ed Husic:

“You've got people like Jeremy O'Brien and Terry Rudolph, who founded PsiQuantum in 2015. They left our shores because, as is often the case, we got Australians with great ideas that don't get the backing and it's other countries that recognise their value before us…”

JASON:

You know, one of the things that Jeremy O'Brien has said is the, the impact of quantum computing is going to be more profound than any technology to date. And I think that that's a really good quote, it kind of says it all. It's something that's going to be more powerful, have more impact than artificial intelligence.

Audio Excerpt - Jeremy O’Brien:

“I believe the term impossible will soon be banished from our field. We can see the path forward, a path towards cleaner skies and seas, and lifesaving drugs developed faster than ever before. This quantum age is fast approaching and it will be moulded by Australian hands.”

JASON:

I guess the other thing we know though is that a lot of venture capital bets don't pay off. And if PsiQuantum can't do what they say they can do, then I think that's going to have repercussions for this Labor Government and also for Ed Husic, because they're promising to build it by 2027. So if Anthony Albanese wins the election next year, they'll still be in government in 2027 and taxpayers are going to start demanding results.

RICK:

There's a little bit more to this story, I think, which is precisely how PsiQuantum came to be awarded the contract. Can you walk me through, I guess, the timeline of what happened and what decisions were made before PsiQuantum was even granted this opportunity?

JASON:

You know, it's my understanding that Ed Husic began having very informal discussions with people connected to PsiQuantum in the second half of 2022, and he moved pretty quickly.

Ed Husic had a few meetings with, you know, different people who are connected to PsiQuantum. And it didn't take much longer for him to say, okay, why don't I go over to California and have a look at this company. Meeting the people at PsiQuantum face to face, having a tour of the headquarters, and as soon as he got back he said to his department, let's get to work on this, and that's exactly what happened.

But I think once PsiQuantum knew that they had Ed Husic on the hook, they went and engaged some pretty powerful lobbyists who are quite close to the Labor Party. People like, you know, Richard Marles’ former chief of staff and, you know, Gerard Richardson who ran Labor's communications team for the 2019 election. And then they also commissioned an economic impact report from Mandala. This is another consultancy that's close to the Labor Party. Amit Singh, the managing partner at Mandala, he was Bill Shorten's Deputy Chief of Policy. He was a senior economic adviser to Julia Gillard and Rudd. So PsiQuantum, they’ve got some pretty influential lobbyists who’ve certainly got the ear of some very powerful people in the government.

RICK:

After the break, what the reaction’s been in Canberra to the government putting so many eggs in one quantum basket.

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RICK:

So Jason, you’ve been looking at how PsiQuantum won this big deal, and around the same time they brought in some pretty influential lobbyists, but did you find anything else as you looked a bit deeper into it?

JASON:

So, PsiQuantum first approached the Australian government through Austrade, I think as early as 2019, you know, trying to attract the interest of the, you know, the then Morrison government to say this is a company that's worth investing in. The Morrison government did take a look at it. They said no the first time. PsiQuantum came back a number of times. And then in 2021, when the Australian venture capital firm Blackbird got involved I think, PsiQuantum came back to the government again. In 2022, when Anthony Albanese became Prime Minister, I think PsiQuantum thought, well, new government, new opportunity to try to get someone interested in this idea.

When it comes to Blackbird, the Australian venture capital firm, Ed Husic appointed to the National Quantum Advisory Committee a senior associate at Blackbird. Her name is Clare Birch. And then, in December last year, he appointed another Blackbird executive, the head of impact and also the operating principal at Blackbird. Her name's Kate Glazebrook, and Minister Husic appointed her to the seven member Industry Innovation Insights Australia Board, which advises the government on science, innovation and research matters, and is responsible for the promotion of investment in industry. You know, Ed Husic has been at pains to emphasise that, in his view, both of these committees are very much at arm's length from the decision to invest in PsiQuantum.

One thing we've been very careful to emphasise in this story is we're not saying that there is a conflict of interest in some of these relationships, but I think often in politics it's the perception of a conflict of interest that becomes the issue.

More transparency was something that Anthony Albanese promised in opposition and I think there are certainly questions to be asked here. And I think, you know, Australian taxpayers need to be satisfied that this process was fair, open and transparent as possible.

RICK:

Jason, we've been talking about this massive ambition of building the first useful quantum computer. The deal has been made with PsiQuantum. There's been a little bit of kind of scuttlebutt about that deal. What's the reaction been in Canberra to the announcement?

JASON:

I think a lot of people were staggered by the size of the investment in this company. You know, this is almost unprecedented that an Australian government, right, in association with the Queensland, Government would invest so much taxpayer funds into the one company. So when it was announced, the immediate reaction from people like Paul Fletcher, the opposition's Spokesman for Science, he was absolutely flabbergasted.

Audio Excerpt - Paul Fletcher:

“This process has been clouded in secrecy. There was no public transparent expression of interest process to call for applications. A small number of companies, as I understand it, were invited to participate but they were required to sign non-disclosure agreements…”

JASON:

And he wasn't the only one. While we haven't seen it publicly, because a lot of the quantum computing people here in Australia are dependent on federal government funding, but their reaction, well publicly people have been saying this is a good idea and they've backed it. Privately there's a lot of anger and concern that the federal government is putting so much money into one company saying, gee, I thought money was scarce and there wasn't any kind of money for us but suddenly the government's gone and given $1 billion to one company. And they are saying, well why not spread this money around and give us all a more equal chance of developing quantum computing in Australia. So I think people were, yeah, really shocked and surprised at the size of the investment.

RICK:

And of course, I can't help but notice the symmetry between, you know, PsiQuantum’s attempts at trying every possible available route to get government interested in making the investment in the technology itself, which is allowing a quantum computer to try every conceivable calculation in as few steps as possible. Did we make the right decision in going with PsiQuantum given this race is so important?

JASON:

Well, this might be a case like Blue Poles. You know, the painting that Gough Whitlam bought to much public outcry for $1 million in the 1970s. The value of Blue Poles today has been a great return on that investment, despite the controversy at the time. We might say the same thing happened with PsiQuantum. That this big stake that we've taken in PsiQuantum, yes there's a lot of outcry now, in 20 years we might be saying this is one of the best investments the Australian government's ever made. But it's impossible to know that now and there's also a big chance that this company might not be able to do what it says it can.

RICK:

And in the meantime, its qubit’s at a thousand paces.

JASON:

That's right.

RICK:

Jason, thank you so much for taking the time to speak with me today.

JASON:

Rick, it's been a great pleasure to speak with you.

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RICK:

Also in the news today,

Australia has a new governor general. Lawyer, businesswoman and former AFL commissioner Sam Mostyn was sworn in yesterday. She’s only the second woman to hold the position.

And President Joe Biden met with his family at Camp David yesterday to discuss the prospect of dropping out of the presidential race. It’s been reported the family has emerged with a resounding view of continuing in the campaign.

The New York Times has reported the most adamant voice in the room was his son Hunter Biden, who argued voters needed to meet the Joe Biden that he knows. Hunter was convicted of felony weapons charges last month.

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