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The Australian physicist shook the heavy metal box that resembled a beer cooler but held a quantum sensor. A computer screen showed that the cutting-edge device with lasers manipulating atoms into a sensitive state continued functioning despite the rattling.

He and his team had built a hard-to-detect, super-accurate navigation system for when satellite GPS networks are jammed or do not work that was robust and portable enough to be used outside a lab. It could potentially guide military equipment, from submarines to spacecraft, for months with a minuscule risk of directional error a significant improvement over what is available today.

The fact that we can do that is probably a wild, insane surprise, said Russell Anderson, the head of quantum sensing at Q-CTRL, a start-up that recently signed a deal with Australias Department of Defense to develop and field-test its quantum sensor technology.

The global race to develop quantum technologies of all kinds has accelerated as governments pour investment into the industry and scientists make rapid technical advances. But to maintain an edge over China which takes a centralized approach to tech development the United States is considering tougher export controls for quantum. And allies say more limits, on top of those already in place, could stifle momentum because the strength of the American model of tech development comes from its openness, combining pools of public research money with private investment to support scientists from many countries.

For the United States and its allies, the challenge is clear: how to balance protectionism and cooperation in a transformative field where talent is scarce and less concentrated in the United States, making interdependence inevitable and increasingly necessary.

The world has changed, and the pace of technology is much faster than it used to be, said John Christianson, a military fellow at the Center for Strategic and International Studies in Washington, who co-authored a recent report on AUKUS, the 2021 security agreement among the United States, Britain and Australia. We cant just rely on Americans always having the best stuff.

Secretary of State Antony J. Blinken and Secretary of Defense Lloyd Austin III are in Australia this week for annual bilateral meetings. Australian officials say they will likely be urged to hurry up and clarify the rules for technology sharing in rapidly-changing fields.

In just the past few years, quantum technology has moved to the cusp of widespread use as companies, nations and investors have helped scientists turn the extreme sensitivity of atoms into powerful sensors, more secure communication systems and superfast quantum computers that could drive exponential progress in artificial intelligence, drug discovery, mining, finance and other industries.

With its centralized method of funneling billions of dollars to military-affiliated universities, China has produced results that have nearly matched or exceeded the American approach. Some of its claims about quantum breakthroughs and funding pledges have been disputed, but a demonstrable rise in Chinese expertise began a decade ago with surging government investment after the Edward Snowden leak confirmed in 2013 that U.S. and British intelligence agencies had found ways to crack and spy on encrypted internet traffic.

In 2017, China built a 91-acre campus in Hefei, west of Shanghai, with the worlds largest national laboratory for quantum science. Since then, Chinese researchers have published thousands of papers demonstrating critical advances, including, in 2021, the use of a space-to-ground quantum communication network linking satellites to a fiber-optic cable connecting Shanghai to Beijing.

For China, the Snowden thing had a psychological impact, said Edward Parker, a physicist focused on emerging technologies at the RAND Corporation. Theres also some aspect of national pride they identified this as a very demonstrable quantum technology where they could become the best in the world.

Jian-Wei Pan, sometimes called Chinas father of quantum, has been an important figure. His Ph.D. focused on quantum information science at the University of Vienna under Anton Zeilinger, one of last years Nobel Prize winners in physics, and Chinas most notable achievements have come with communication that leverages the laws of quantum physics to protect data.

According to the Australian Strategic Policy Institutes critical technology tracker, China appears to be lagging more in quantum computers which perform many calculations in one pass, making them faster than todays digital computers that perform each calculation separately while narrowing the gap in quantum sensing for navigation, mapping and detection. Chinese scientists have even said they are building a quantum-based radar to find stealth aircraft with a small electromagnetic storm, though quantum specialists outside China have questioned their claims.

One of the doubters is Michael Biercuk, 43, the founder of Q-CTRL, an American physicist with a military mien and a Harvard Ph.D. who moved to Australia in 2010 to teach at the University of Sydney. He and his start-up, with offices in Sydney, Los Angeles, Berlin and Oxford, are among a cutting-edge group of global quantum leaders who see hyperbole and statecraft in many Chinese quantum announcements and hope to capitalize on what technology-sharing partnerships like the AUKUS security agreement represent.

AUKUS, for us, is exceptionally important, said Professor Biercuk, noting that Q-CTRL works on sensors and quantum computing. Its a real opportunity for the homegrown capability were building in Australia to be deployed into an international framework.

About half of Q-CTRLs 100 employees are Australian, half from other countries, and many, including Professor Biercuk, have experience working for Americas elite defense and civilian laboratories. The companys main software product, which stabilizes the hardware against everything that goes wrong in the field, Professor Biercuk said, is already being used by quantum developers in the United States, Canada and Europe, where precise sensor technology is also advancing.

But moving sensitive technology from one nation to another, or developing technology with cross-border teams, has become increasingly fraught.

Fearing that its technology will be used to build the economies of larger countries, Australia has been exploring how to keep its own advances secret. Q-CTRLs scientists in Sydney already cautiously avoid sharing technical information with colleagues in the United States to avoid being subject to the U.S. International Traffic in Arms Regulations (ITAR), a set of restrictive safeguards for military technology that is widely seen as a major obstacle to modernizing Americas alliances in the region.

If American officials go through with their plan to expand export controls for quantum computing, following a pattern that began with advanced microchips, information itself could be considered an export, meaning details could not be shared with people born outside the United States.

Its just very complicated if you have to have separate lab facilities with more sensitive things, said Dr. Parker, the RAND physicist.

Many quantum companies in the United States and elsewhere, including Q-CTRL, are hoping for sensible, clear guidelines. Australian officials and some American lawmakers are also pushing for an exemption from U.S. arms regulations so Australian companies would not be treated as foreign entities.

For many who work closely with advanced technology, where innovation requires information sharing, there is a gnawing worry that the United States and its closest allies are at risk of squandering recent gains by waiting too long to clarify the legal mechanisms for cooperation.

On a recent afternoon in the former locomotive factory where Q-CTRL has its offices, Professor Biercuk said the next few years will be crucial. If friendly democracies dont build quantums strengths together, other countries will speed past with sharper militaries and lucrative opportunities.

You better believe that China and any nations allied with China are not going to put restrictions on themselves or their partners, he said. Anytime we overly regulate emerging areas of science, we risk simply stopping progress locally and ceding technological advantage to our adversaries.

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Quantum Tech Intended for National Security Is Testing U.S. Alliances - The New York Times