A new Australian Office of Artificial Intelligence (AI) will be created to manage the boom in investment and associated demand for electricity and water resources, the federal government said, with developers expected to contribute to new power generation.
The AI Office will support the growth of an industry in Australia's national interest, prime minister Anthony Albanese said on 15 July, with AI standards designed to regulate impacts on energy, copyright, productivity, education and labour rights.
Australia will set rules for large data centres, including where they are built and how they use energy and water, with a legal obligation for developers to underwrite new electricity supply so that increased costs are not passed on to existing consumers, Albanese said.
To ensure this, Australia's federal government will need to work with the six states, which have differing approaches to energy policy. Queensland favours gas- and coal-fired generators, while other states are seeking to increase wind power capacity, including Victoria, which is eyeing offshore wind projects to replace its brown coal-fired power stations next decade.
Canberra's approach will be considered at a national cabinet meeting of state, territory and federal leaders in August, with the standards expected to be legislated early next year, Albanese said.
Regulation roll-out
The AI Office plan comes after months of statements by ministers and industry suggesting that copyright concerns and impacts on water and power networks would require intervention, after years of a hands-off approach.
The government's national AI plan, released in December, spelled out a loose framework of expectations for data centre developers, with Canberra promising in March that regulation would eventually be enacted.
Environmental groups have criticized the speed of data centre development, with the Climate Council last month warning that expansion of data centres is outstripping the pace of renewable energy investment and risks undermining both Australia's climate targets and electricity prices.
Data centres developers typically prefer proximity to users in the major capitals of Sydney and Melbourne. State and local authorities have reported community opposition due to the scale of some projects and competition for land use, with some data centre sites planned for future housing.
The Australian Industry (Ai) Group welcomed the announcement and said Australia was poised to benefit from more than A$10 trillion ($7 trillion) in data centre investments by 2030, boosting demand for critical minerals for semiconductor-conductors, microchips and processors to supply the sector.
But investment could flow elsewhere if over-regulation undermines Australia's competitiveness, productivity and comparative advantages, the Ai Group warned, calling on Canberra to also focus on developing AI-skilled workforce and lift collaboration between Australian businesses and scientific researchers.
