Australia Unveils National AI Plan: Light-Touch Regulation and Data Centre Investment Focus

Australia's national AI plan has just been released. Who exactly will benefit?

University of Sydney provides funding as a member of The Conversation AU. Today, the Albanese Labor government released the long-awaited National AI Plan, "a whole-of-government framework that ensures technology works for people, not the other way around". With this plan, the government promises an inclusive artificial intelligence (AI) economy that protects workers, fills service gaps, and supports local AI development. In a major reversal, it also confirms Australia won't implement mandatory guardrails for high-risk AI. Instead, it argues our existing legal regime is sufficient, and any minor changes for specific AI harms or risk can be managed with help from a new A$30 million AI Safety Institute within the Department of Industry. Avoiding big changes to Australia's legal system makes sense in light of the plan's primary goal - making Australia an attractive location for international data centre investment. The initial caution is gone After the public release of ChatGPT in November 2022 ushered in a generative AI boom, initial responses focused on existential risks posed by AI. Leading AI figures even called for a pause on all AI research. Governments outlined plans to regulate. But as investment in AI has grown, governments around the world have now shifted from caution to an AI race: embracing the opportunities while managing risks. In 2023, the European Union created the world's leading AI plan promoting the uptake of human-centric and trustworthy artificial intelligence. The United States launched its own, more bullish action plan in July 2025. The new Australian plan prioritises creating a local AI software industry, spreading the benefit of AI "productivity gains" to workers and public service users, capturing some of the relentless global investment in AI data centres, and promoting Australia's regional leadership by becoming an infrastructure and computing hub in the Indo-Pacific. Those goals are outlined in the plan's three pillars: capturing the opportunities, spreading the benefits, and keeping us safe. What opportunities are we capturing? The jury is still out on whether AI will actually boost productivity for all organisations and businesses that adopt it. Regardless, global investment in AI infrastructure has been immense, with some predictions on global data centre investments reaching A$8 trillion by 2030 (so long as the bubble doesn't burst before then). Through the new AI plan, Australia wants to get in on the boom and become a location for US and global tech industry capital investment. In the AI plan, the selling point for increased Australian data centre investment is the boost this would provide for our renewable energy transition. States are already competing for that investment. New South Wales has streamlined data centre approval processes, and Victoria is creating incentives to "ruthlessly" chase data centre investment in greenfield sites. Under the new federal environmental law reforms passed last week, new data centre approvals may be fast-tracked if they are co-located with new renewable power, meaning less time to consider biodiversity and other environmental impacts. But data centres are also controversial. Concerns about the energy and water demands of large data centres in Australia are already growing. The water use impacts of data centres are significant - and the plan is remarkably silent on this apart from promising "efficient liquid cooling". So far, experience from Germany and the US shows data centres stretching energy grids beyond their limit. It's true data centre companies are likely to invest in renewable energy, but at the same time growth in data centre demands is currently justifying the continuation of fossil fuel use. There's some requirement for Australian agencies to consider the environmental sustainability of data centres hosting government services. But a robust plan for environmental assessment and reporting across public and private sectors is lacking. Who will really benefit from AI? The plan promises the economic and efficiency benefits of AI will be for everyone - workers, small and medium businesses, and those receiving government services. Recent scandals suggest Australian businesses are keen to use AI to reduce labour costs without necessarily maintaining service quality. This has created anxiety around the impact of AI on labour markets and work conditions. Australia's AI plan tackles this through promoting worker development, training and re-skilling, rather than protecting existing conditions. The Australian union movement will need to be active to make the "AI-ready workers" narrative a reality, and to protect workers from AI being used to reduce labour costs, increase surveillance, and speed up work. The plan also mentions improving public service efficiency. Whether or not those efficiency gains are possible is hard to say. However, the plan does recognise we'll need comprehensive investment to unlock the value of private data holdings and public public data holdings useful for AI. Will we be safe enough? With the release of the plan, the government has officially abandoned last year's proposals for mandatory guardrails for high-risk AI systems. It claims Australia's existing legal frameworks are already strong, and can be updated "case by case". As we've pointed out previously, this is out of step with public opinion. More than 75% of Australians want AI regulation. It's also out of step with other countries. The European Union already prohibits the most risky AI systems, and has updated product safety and platform regulations. It's also currently refining a framework for regulating high-risk AI systems. Canadian federal government systems are regulated by a tiered risk management system. South Korea, Japan, Brazil and China all have rules that govern AI-specific risks. Australia's claim to have a strong, adequate and stable legal framework would be much more credible if the document included a plan for, or clarity about our significant law reform backlog. This backlog includes privacy rights, consumer protection, automated decision-making in government post-Robodebt, as well as copyright and digital duty of care. Ultimately the National AI Plan says some good things about sustainability, sharing the benefits, and keeping Australians safe even as the government makes a pitch for data centre investment and becoming an AI hub for the region. Compared with those of some other nations, the plan is short on specificity. The test will lie in whether the government gives substance to its goals and promises, instead of just chasing the short-term AI investment dollar.

AI companies could be forced to invest in renewable energy amid warning tech will use 12% of Australia's power

The federal government could force AI companies to boost Australia's power grid and build new wind and solar projects to help supply their energy-intensive data centres, amid concerns the booming industry could suck up vast amounts of electricity and water. Business groups, unions and the tech sector have welcomed the federal government's national AI plan, which maps Labor's plans for a light-touch approach to regulating the sector in a bid to capture economic and productivity benefits from the technology. But tech experts have warned Australia has been too slow to set up guardrails and guidelines for AI, risking major harms and missing out on investment. With warnings AI tech could require 12% or more of Australia's power, industry minister, Tim Ayres, promised a "co-requisite" for big firms to pull their weight. "I want to see artificial intelligence digital infrastructure underwriting and securing our energy future using these investments to pay for enhanced capability," he said. Ayres' decision not to pursue a new set of laws to govern AI, and instead rely on existing legislation, was welcomed by peak business groups eager to see the technology roll out faster. The Business Council of Australia called AI a "once-in-a-generation economic opportunity" to boost productivity and raise living standards, but CEO Bran Black was still critical that even the light-touch regulation foreshadowed by Ayres would "hinder the potential benefits". The Australian Council of Trade Unions welcomed commitments for unions and workers to be consulted about widespread workplace changes, claiming AI's rollout had so far done little to improve working conditions, and instead had seen "Orwellian levels of surveillance" from bosses and more intense workplace conditions. "Workers aren't afraid of AI but are rightly sceptical about letting it go unchecked," said ACTU assistant secretary, Joseph Mitchell. Dr Sue Keay, director of the AI Institute at the University of New South Wales, said the government had been too slow to respond to growing concerns. "The plan rightly lists everything we should be doing, but fails to commit to any real investment or any sense of urgency," Keay said. "It's hard not to feel like we're turning up to a global race in thongs, asking where the starting line is, while everyone else is already sprinting to the finish line." The plan also noted the need to expand new energy and cooling technologies for AI systems, noting data centres consumed about four terawatt hours of power in 2024 - 2% of grid-supplied power - with the Australian Energy Market Operator having forecast that could rise to 12% by 2050. Concerns are growing worldwide over data centres diverting large amounts of water and power from local communities to be used in cooling systems. Ayres said the government would set out data centre principles in early 2026, pledging in a speech that "key co-requisites for data centre investment will include additional investment in renewable energy generation and water sustainability." He noted Amazon Web Services was investing in three new solar farms to power its Australian infrastructure. In an interview on Sky News, Ayres said AI companies could be required to invest in storage or gas peaking. "This is an unparalleled opportunity for new data centre investment to underwrite, to pay for new generation and new transmission capability," he said. The Coalition opposition claimed there were "serious defects" in Labor's plan, criticising a lack of detail on power generation, the commitment to include unions in workplace negotiations, and slow progress on reforms to privacy. "The economic opportunity which is AI will pass us by if Labor's glossy document, which is scant on detail, lacking vision and absent of any action, is all they have to offer," the shadow treasurer, Ted O'Brien, said. The Greens senator, David Shoebridge, claimed the government was "choosing corporate profits over community rights" in eschewing new legislation. "The government is kicking kids off social media next week allegedly because of mental health concerns, but opening the floodgates to unregulated AI agents. That's cooked," he said. Ayres defended the decision not to pursue standalone legislation on AI. "The technology is advancing by the day. There are no guarantees that a "set and forget" regulatory approach would keep Australians safe," he said. "An attempt at catch-all legislation risks doubling up on rules and undermining the efficacy and accountability of agencies and regulators on their important work."

Labor rejects standalone AI legislation with plan that offers to help 'unlock' public and private data

Roadmap focuses on technology's 'economic benefits' and says existing laws will cover the fast-growing new technology The Albanese government has decided against legislation to manage artificial intelligence, with a new national roadmap emphasising Labor's focus on the technology's economic benefits and plans to "unlock" vast datasets held by private companies and the public service to help train AI models. Supporting and reskilling workers affected by AI in their jobs, boosting investment in datacentres, and sharing the productivity benefits across the economy are key components of the Labor government's National AI Plan, launched on Tuesday. The document also warned of vast water and power resources being sucked up by datacentres, AI-facilitated abuse targeting women, and unanswered questions about copyright protections for artists, writers and journalists at-risk of having their content hoovered up by large language models. But the government has rejected the European Union's example of setting up a stand-alone AI act of parliament - an approach pushed by former minister Ed Husic - saying existing legislation will cover the fast-growing new technology. "This plan is focused on capturing the economic opportunities of AI, sharing the benefits broadly, and keeping Australians safe as technology evolves," said Tim Ayres, minister for industry and science. Ayres' AI plan said the government wanted to "harness AI technologies to create a fairer, stronger Australia where every person benefits from this technological change", saying it could improve health, disability, aged care, education and employment, and help create jobs. The plan is supported by a $30m commitment to set up an AI Safety Institute next year, which will advise the government on the technology, including whether new laws are needed in future. Ayres said the government would measure "success" by "how widely the benefits of AI are shared, how inequalities are reduced", and how workers were supported. As unions voice alarm at AI replacing human employees, the minister said technology "should enable workers' talents, not replace them", and he committed to consultation with unions and business on workplace uptake. The document spruiked Labor's desire for Australia to be a top destination for investment, noting local excellence in datacentres, academic research and AI jobs. Ayres had signalled early in his tenure that a stand-alone act was not in his immediate sights, amid much debate about how the government should respond to the risks and benefits of AI, and calls from business to support the productivity-boosting technology. "The government is monitoring the development and deployment of AI and will respond to challenges as they arise, and as our understanding of the strengths and limitations of AI evolves," the plan said. Labor earlier rejected calls from the business community and Productivity Commission to support a text and data mining exemption for AI companies to help train their computer models on copyright material like news reporting, books and film. The new AI plan says the government is still keen to help "unlock high value datasets for pilot AI use cases, from both public and private sources" to help train those models. Government sources said those plans were still in early development, and didn't rule out new licensing schemes or other compensation. The plan suggests "non-sensitive" public datasets from the government, such as the Bureau of Statistics, could be opened up to AI companies. "AI models are only as good as the data they are trained on. Australia has high-quality and comprehensive data sets that could support AI innovations that create value for the AI sector, can deliver public goods, and that better reflect the Australian context," the plan said. "Both government and the private sector hold high value data sets which can support a globally competitive Australian AI sector." The plan also noted the need to expand new renewable energy and efficient cooling technologies for systems, noting datacentres consumed about four terawatt-hours of power in 2024 - 2% of the grid-supplied power - with expectations this could triple by 2030. Datacentres, which can consume tens of millions of litres of water, would need to develop new technology to cool their projects and reduce their water usage, the plan said.

Australia rolls out AI roadmap, steps back from tougher rules

Australia currently has no specific AI laws though the centre-left Labor government last year signalled it would introduce voluntary guidelines amid concerns over privacy, safety and transparency. Australia on Tuesday unveiled a roadmap to ramp up the adoption of artificial intelligence across its economy but said it would rely on existing laws to manage emerging risks, stepping back from earlier plans for tougher rules on high-risk scenarios. Australia currently has no specific AI laws though the centre-left Labor government last year signalled it would introduce voluntary guidelines amid concerns over privacy, safety and transparency. In its National AI Plan released on Tuesday, Labor said it would focus on luring investment in advanced data centres, building AI skills to support and protect jobs, and ensuring public safety as AI becomes more integrated into daily life. "The government's regulatory approach to AI will continue to build on Australia's robust existing legal and regulatory frameworks, ensuring that established laws remain the foundation for addressing and mitigating AI-related risks," it said in the plan. Agencies and regulators will remain responsible for identifying and managing potential AI-related harms within their sectors, it said. The roadmap comes after the government last month said it would set up an AI Safety Institute in 2026 to help authorities monitor emerging risks and respond to threats. Global regulators have increasingly raised concerns about misinformation associated with generative AI tools such as Microsoft-backed OpenAI's ChatGPT and Google's Gemini, as their use becomes widespread. Federal Industry Minister Tim Ayres said the AI roadmap aims to ensure Australians can benefit from new technology while maintaining a balance between innovation and risk management. "As the technology continues to evolve, we will continue to refine and strengthen this plan to seize new opportunities and act decisively to keep Australians safe," Ayres said. But Australian Catholic University Associate Professor Niusha Shafiabady said there were critical gaps in the government's updated AI roadmap. "The plan is ambitious in unlocking data and boosting productivity, but it leaves critical gaps in accountability, sovereignty, sustainability, and democratic oversight," Shafiabady said. "Without addressing these unexplored areas, Australia risks building an AI economy that is efficient but not equitable or trusted."

Labor unveils plan to brace economy for artificial intelligence

As part of the announcement, the government has committed $29.9 million to establish the AI Safety Institute in early 2026. "The National AI Plan is about making sure technology serves Australians, not the other way around," Industry and Innovation Minister Tim Ayres said. "This plan is focused on capturing the economic opportunities of AI, sharing the benefits broadly, and keeping Australians safe as technology evolves. "AI will help close gaps in essential services, improve education and employment outcomes, and create well paid jobs in future industries." Mr Ayres said the government's AI plan would help to ensure that AI delivered benefits to all Australians. The three pillars of the plan include capturing opportunities, spreading the benefits of AI and keeping Australians safe. However, the OECD has highlighted several risks linked to AI's diffusion, including worsening income and wealth inequality by accelerating job loss through automation. The government hopes to maximise AI benefits by investing $1 billion in technology under the National Reconstruction Fund. It will also expand the National Broadband Network, seek to attract investment in data centres and establish a framework for generative AI in schools. Mr Ayres said the government's approach was focused on ensuring Australians shared in the benefits of productivity gains while minimising risks. The 140-page National AI Plan has set out three core goals: Capturing economic opportunity, spreading benefits, and keeping people safe through regulation. The government claimed that Australia has become a global AI player by attracting billions in data centre investment. The plan has warned that although AI offers major productivity and competitiveness boosts, "realising the full benefits of AI will not happen by chance". "This plan sets out the steps the Australian government will take to support Australia to build an AI-enabled economy that is more competitive, productive and resilient." "Our role is to ensure settings are fit for purpose to attract and direct investment, enable successful adoption and proactively identify and address harms as appropriate." The plan called for the public sector to adopt AI in order to life productivity and provide better job satisfaction. The government said the plan was intended to be adaptive, with progress tracked through national data sources and tools such as the NAIC AI Adoption Tracker.

Australia rolls out AI roadmap, steps back from tougher rules

SYDNEY, Dec 2 (Reuters) - Australia on Tuesday unveiled a roadmap to ramp up the adoption of artificial intelligence across its economy but said it would rely on existing laws to manage emerging risks, stepping back from earlier plans for tougher rules on high-risk scenarios. Australia currently has no specific AI laws though the centre-left Labor government last year signalled it would introduce voluntary guidelines amid concerns over privacy, safety and transparency. In its National AI Plan released on Tuesday, Labor said it would focus on luring investment in advanced data centres, building AI skills to support and protect jobs, and ensuring public safety as AI becomes more integrated into daily life. "The government's regulatory approach to AI will continue to build on Australia's robust existing legal and regulatory frameworks, ensuring that established laws remain the foundation for addressing and mitigating AI-related risks," it said in the plan. Agencies and regulators will remain responsible for identifying and managing potential AI-related harms within their sectors, it said. The roadmap comes after the government last month said it would set up an AI Safety Institute in 2026 to help authorities monitor emerging risks and respond to threats. Global regulators have increasingly raised concerns about misinformation associated with generative AI tools such as Microsoft-backed OpenAI's ChatGPT and Google's Gemini, as their use becomes widespread. Federal Industry Minister Tim Ayres said the AI roadmap aims to ensure Australians can benefit from new technology while maintaining a balance between innovation and risk management. "As the technology continues to evolve, we will continue to refine and strengthen this plan to seize new opportunities and act decisively to keep Australians safe," Ayres said. But Australian Catholic University Associate Professor Niusha Shafiabady said there were critical gaps in the government's updated AI roadmap. "The plan is ambitious in unlocking data and boosting productivity, but it leaves critical gaps in accountability, sovereignty, sustainability, and democratic oversight," Shafiabady said. "Without addressing these unexplored areas, Australia risks building an AI economy that is efficient but not equitable or trusted." (Reporting by Renju Jose in Sydney; Editing by Sonali Paul)