Australia has valuable cards to play in the AI future, new report finds

Australia has valuable cards to play in the AI future, but critical gaps remain, new report finds Sat 13 Jun 2026 at 10:43am In short: A new report says Australia can capitalise on AI, with valuable cards to play strategically. The Tech Policy Design Institute has released its "AI Agency Tool", which allows policymakers to see where Australia's AI strengths and weaknesses lie. What's next? The report comes as concerns grow about AI safety and data centres around the world. Australia has more AI potential than Australians think, with valuable cards to play strategically, a new report has claimed. The new research has found Australia has an opportunity to become a major regional data centre hub, to leverage its critical minerals resources in global AI supply chains, and to exert influence over global AI norms. But it said Australia still needed to address critical gaps in its regulatory controls that define how and where data can be collected, stored, and accessed in ways that uphold privacy and human rights. And it said governments needed to pay more attention to how to power data centres with renewable and clean energy. The report, Expanding AI Sovereignty to AI Agency, released by the Tech Policy Design Institute (TPDi), has delivered the first independent, evidence-based assessment of Australia's AI capabilities at the national level. It uses the TPDi's new "AI Agency Tool", presented in the paper, which was developed in consultation with more than 250 experts, to measure Australia's degree of "agency" across 103 different AI capabilities and make recommendations in each area. It also mapped its findings onto the Australian government's 2025 National AI Plan to see if the government's major AI priorities and commitments aligned with the evidence-based assessment of what Australia needed. And it said Australia's AI capabilities were far stronger than the prevailing narrative suggested. "The data shows Australia is in a stronger position than we give ourselves credit for; we have firm foundations and significant potential to harness," Zoe Jay Hawkins, TPDi co-founder and lead author, said. "Australia has valuable cards in its hand. The opportunity now is to play them strategically — just like the prime minister has leveraged Australia's gas reserves to secure diesel supply." But the report comes amid growing concerns about AI safety and data centres across the world. Last week, the ABC's Four Corners reported that Anthropic and Microsoft were seeking new territory to build massive data centres as a backlash built against data centres in some US communities, and they were looking to Australia. What is the Tech Policy Design Institute? The Tech Policy Design Institute (TPDi) is a relatively new think tank. It was spun out of the Australian National University in January 2025. Professor Johanna Weaver, executive director of the institute, was formerly Australia's chief cyber negotiator at the United Nations. Zoe Jay Hawkins, deputy executive director, is an expert researcher for the Organisation for Economic Co-operation and Development (OECD). The institute's special advisers include Julie Inman Grant (Australia's eSafety commissioner), Frances Haugen (Facebook whistleblower), and Professor Rod Sims (former chair of the ACCC). Ms Inman Grant has drawn ire from US social media platform owner Elon Musk (the world's first trillionaire), and his online supporters, after she issued notices to X (formerly Twitter) to try to remove footage of a church stabbing from its platform. The TPDi draws funding from the Tech Policy Design Fund, which operates on the basis of a blind trust. Contributors to the fund include Commonwealth Bank, the Minderoo Foundation, the Department of Industry, Science and Resources, Qoria, Microsoft, Amazon, Apple, and Atlassian, among other companies. The institute says it does not represent the views of its sponsors. Federal politicians from the Labor Party, the Liberal Party, the Australian Greens, and independent teal MPs have all welcomed the TPDi's establishment. Australia's strongest AI capabilities In November, the TPDi released a discussion paper with a draft version of its "AI Agency Tool" and asked for feedback on ways to improve it. The final form of its AI Agency Tool has been released today. It says it created the tool to better inform policymaking and to shift public debate away from "AI sovereignty" (a term that causes too much confusion) towards "AI agency". The term "AI agency" refers to the ability to maintain a strategic combination of access, control, choice, and leverage over the capabilities involved in the development, use and impact of AI technologies. It includes the ability to steer outcomes, to protect national and cultural interests, and to capture value in a globally connected AI system. According to the TPDi's new AI Agency Tool, Australia held "very high agency" in eight out of 103 capabilities. They include: strategic and critical minerals, medical data, geospatial data, environment and resources data, demographic data, infrastructure data, model development in computer vision, and international influence and norm-shaping. It said Australia had the baseline AI maturity and sovereignty required to increase its AI agency, but it had to strategically prioritise. It said the federal government's National AI Plan leaned into Australia's genuine strengths, such as data centres and enabling infrastructure, public cloud, general AI applications, government and small-business adoption, and international engagement. But it said the AI Agency Tool showed where Australia should be doubling down to better leverage certain areas. It said Australia could leverage its potential as a regional data centre hub, it could use Australia's unique wealth of critical minerals to secure the supply of the advanced AI chips, and it could leverage Australia's rich data assets to deliver better emergency management and health outcomes for Australians. "This research allows decision-makers to understand the full chessboard of AI capabilities and make decisions about which to prioritise in the national interest, based on evidence rather than spin," Ms Hawkins said. Critical gaps in National AI Plan and concerns about data centres The report also stressed that not every gap was a failing. It said no country could or should try to excel in all 103 AI capabilities. For example, it said manufacturing AI chips or building frontier models were areas where Australia had a low competitive advantage. But the report identified critical gaps in Australia's National AI Plan that needed more attention from policymakers. It said critical gaps included regulatory oversight, investment in public sector and public interest computing, and the lack of culturally and nationally inclusive AI models. It said the "life cycle management" of data needed to improve in Australia, and more effort needed to be spent building Australians' trust in AI. "[These] capabilities represent the ability of individuals and organisations to make informed and discerning choices to adopt AI, to trust AI, to live with AI, and to ensure AI enhances our democracy," the report said. The report comes as concerns grow in Australia about AI technology and data centres. Loading...The Climate Council said Australia had rapidly emerged as a global data centre hub, becoming the second-largest data centre investment location in the world in 2024, and the pace of data centre building was posing significant risks to Australia's climate goals. "Without additional renewable generation, storage and system flexibility that matches energy demand, the industry risks extending reliance on coal and gas, pushing up power prices, straining system reliability, and creating a material risk to national and state climate targets," it warned. "Data centres can require significant volumes of water, with industry estimates suggesting demand could at least triple by 2030. As climate change intensifies drought and water stress across Australia, unchecked growth could place increasing pressure on already constrained water resources." Last month, Greenpeace Australia called for a moratorium on data centre construction in Australia until safeguards were legislated. Loading..."There are early signs of a data centre-fuelled gas boom in Australia, which will come with massive, nationally significant climate costs," it warned. "For example, the Tamboran proposal for the Northern Territory would effectively double the state's emissions. In NSW, Cloud Carrier's proposed gas-fired project would wipe out NSW's entire projected 2028 emissions cuts." It noted fossil fuel corporations were quietly joining Australia's data centre lobby group as members. The report's author, climate analyst Ketan Joshi, said less than a quarter of Americans now opposed data centre moratoriums. Both the Netherlands and Ireland had implemented them, and other regions in Europe were considering them. [Image text:] NEXTDC OEAXON