Government and Industry Back Quantum-Enhanced AI for the Energy Grid

Pictured left to right: Hon Matt Thistlewaite MP; Hon Tim Ayres, Minister for Science, Industry and Innovation; Tracy Richardson of Schneider Electric; Michelle Simmons of SQC

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Last week, Minister Tim Ayres and the Hon Matt Thistlewaite MP visited SQC in Sydney to announce the Australian Government’s Stage 2 funding through the Critical Technologies Challenge Program (CTCP). Among the awardees, SQC received A$3.6 million (US$2.5m) in funding to continue our work with Schneider Electric, a global energy technology leader.

In the quantum computing field, delivering application-specific products capable of solving real-world challenges today is a rare feat. SQC’s excellence in precision engineering and atomic manufacturing has enabled us to do so, and the impact of our technology is already being seen across industries like telecommunications, energy, high-frequency trading and beyond.  

Minister Tim Ayres described the CTCP program as a test of whether the technology can solve practical national problems: "Not just quantum in the laboratory, but quantum being applied in practical applications that are making a big difference for Australia," he said.

Our Stage 1 results with Schneider Electric delivered.

Solving a critical challenge for the energy grid

Energy grids are under increasing pressure with AI datacenters driving an unprecedented surge in demand. Amid this landscape, the shift to renewable energy sources like rooftop solar and home batteries is changing how electricity is produced and used. And, as a result, energy demand has become more dynamic and difficult to predict.

During Stage 1 of the CTCP, we applied our quantum-enhanced AI chip, Watermelon, to Schneider Electric’s next-day forecasting data to explore whether the system could improve the accuracy of classical models. The results we achieved were meaningful:

Using a hybrid quantum-classical model, we achieved an average 20% improvement in forecasting accuracy against the classical benchmark, with gains up to 41%.

Minister Ayres underscored the significance of this work, noting its potential to “deliver a more efficient electricity system, meaning that we're able to switch faster between different sources of electricity generation” to “drive down electricity costs.”

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A digital render of SQC’s Watermelon chip: a system that generates quantum features which, when used alongside classical features, deliver richer models with greater predictive abilities.

SQC’s second commercial result

Our work with Schneider Electric is the second published commercial demonstration of Watermelon. In October 2025 with Telstra, Australia’s largest telecommunications provider, we showed how the system can be used as an “offload” resource to train classical models more efficiently.

During a 12-month trial, Watermelon matched the accuracy of Telstra’s predictive network model in days rather than weeks. This compute unlock has high value in the context of the resource requirements and costs relating to AI.

The two results come from different industries working on different problems using our Watermelon chip. They point to a rare pathway for today's quantum processors to be used in production environments: alongside CPUs and GPUs to deliver real-world performance gains and lower overall cost.

Looking ahead

SQC’s Stage 2 work with Schneider Electric will expand Watermelon to production-scale datasets across hundreds of additional homes. It will also integrate Watermelon directly into Schneider Electric's AI workflows, moving the technology from test to production.

Speaking at the press conference, the Hon Thistlewaite Matt MP put it another way:

"Quantum computing is a bit like a unicorn. It's often spoken of, but rarely ever seen in practice," he said. "The team here at Silicon Quantum Computing … are breathing life into the unicorn, making it a reality and delivering better outcomes for Australians."

Read the full press release here.