Australia has a narrow window to act if it wants any leverage in what comes next in AI, the most transformative technology of our era. Building data centres and enabling AI training to happen here is the best way for Australia to shape its own future.
The pace of AI progress has been astronomical and shows no sign of slowing. Novel AI-discovered drugs are showing promise in clinical trials. Nations are already integrating AI into military and national security applications. And some of the world’s best software engineers are handing large portions of their jobs over to AI. Experts may disagree on exact timelines and trajectories, but there is clear consensus that significant disruption lies ahead, carrying both tremendous opportunity and risk.
The frontier of AI is being advanced by just two countries – the United States and China. Why? Because size matters: the more computing power used to train and deploy AI models, the better the capabilities. That is why leading US tech companies are investing over US$650 billion (A$940 billion) in AI infrastructure this year alone. AI is coming, with or without Australia’s involvement.
So what can Australia do? Australia’s 2025 National AI Plan wisely avoided any ambition to develop homegrown frontier models, which would cost billions, only to fall behind in months. But Australia still needs a foothold in the AI value chain. Ambitious data centre construction and enabling companies to conduct AI research in the country is the clearest path forward, delivering economic gains and earning Australia a voice in how AI is governed.
Indeed, Australia could become an AI data-centre superpower. Filled with specialised AI chips, data centres provide the computing power used to train and deploy advanced AI. The demand for this infrastructure, and the energy to power it, is soaring.
Australia is uniquely placed to meet that demand. Its land, solar and wind resources and skilled trades workforce allow it to build large-scale clean energy projects quickly. AI companies are already agreeing to absorb any energy price increases that their operations would otherwise impose on households. Data centres could de-risk investment in clean-energy projects and accelerate Australia’s energy transition. AI chip supply will be constrained over the next few years, meaning that AI infrastructure built in Australia wouldn’t be adding to global computing power; it would be displacing dirtier alternatives. Australian AI data centres can be good for the grid and good for the world.
When major AI companies can build and conduct frontier AI research in a country, talent follows. Engineers relocate, institutional partnerships form and startups spin out, seeding a vibrant AI ecosystem. The national data-centre principles that the Australian government released on 23 March show a recognition of this opportunity by prioritising projects that provide compute access on favourable terms for Australian innovators.
Strategic benefits run deeper. AI labs with a substantive presence in Australia would have stronger incentives to consider Australian policy objectives, engage meaningfully with the Australian AI Safety Institute and more readily support Australia’s intelligence and defence agencies. Data centres represent the point of entry, but the broader objective is positioning Australia as an active participant in shaping the AI future.
Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton was right when he said copyright laws weren’t working in the AI age. They’re a barrier to AI companies conducting research in Australia and building out at scale. Unlike the US, the European Union, Singapore and Japan, Australia has no broad fair-use or text-and-data-mining exemption to copyright, so AI companies can’t freely train on publicly available data here. The price of an Australian license wouldn’t be the problem. The precedent would. If an AI company pays for a copyright license in Australia, it concedes that a market for training data exists, which could be used to undermine the US fair use doctrine that has underpinned AI development globally. AI companies seem unwilling to take that risk.
The creative industry’s concerns warrant serious consideration, but the current framework pushes investment away and stymies Australian startups while still failing to protect Australian creators. AI models trained overseas use Australian creative work regardless. No one is a winner. One option is for AI companies to contribute to a fund that supports the creative industry, providing compensation outside of copyright frameworks. But the government needs to act. Australia needs AI companies more than AI companies need Australia.
Australia has other hard AI questions to confront. From automated cyber attacks to the potential development of novel bioweapons, we are only beginning to grasp what is coming. And beyond security, deeper questions loom: how to ensure AI augments rather than replaces human labour, empowers rather than disempowers citizens, and supports rather than erodes the Australian way of life.
AI’s effects will not be constrained by national borders – opting out doesn’t mean opting out of its consequences. It just means losing the tools, expertise, and leverage needed to prepare and respond. Preventing AI data centres from being built in Australia will not slow the technology down. The infrastructure will be built elsewhere in countries with less interest in safety and democratic values, and with no obligation to consider Australian interests. AI is poised to transform the economic and national security landscape. Australia can have a seat at the table as the rules are written or accept a future shaped entirely by others.