AI resilience is the next step after the Government’s AI regulatory framework

The government has taken an important first step by developing an AI regulatory framework; The next step should be an AI infrastructure strategy, writes Paul Budde.

THE FEDERAL GOVERNMENT DESERVES CREDIT FOR recognizing that AI has become an issue of national importance. His new artificial intelligence strategy It touches on governance, energy and water consumption, and the protection of Australian copyrights.

These are sensible initiatives.

But these are not the issues that will determine Australia’s future in the AI economy.

The strategy treats AI as another technology that requires significant regulation. But AI is quickly evolving into something much bigger. It is evolving into critical national infrastructure such as telecommunications, cloud computing and digital identity. As AI enters healthcare, finance, education, emergency management and government services, policy questions are fundamentally changing.

The real questions are no longer about how AI should be regulated:

Who will own the infrastructure?

Who will control access?

How durable will it be?

How much of the value created by AI will stay in Australia?

These are strategic questions that are largely missing from the Government’s statement.

The recent Telstra outage provides a useful comparison. The immediate focus was on what caused the failure and how quickly services could be restored. These were important operational issues. But they have largely overlooked the broader strategic question: How resilient is Australia’s communications infrastructure when failures inevitably occur?

The same problem now arises in artificial intelligence.

Modern economies will increasingly rely on AI to support critical services. If these systems fail, are compromised, or become unavailable for commercial or geopolitical reasons, the consequences can go far beyond inconvenience. Therefore, endurance becomes as important as talent.

In my previous article, I talked about digital sovereignty and underlined another emerging risk. Governments around the world are increasingly aware that critical digital infrastructure can be affected not only by technical failures, but also by sanctions, export controls, national security directives and foreign legislation.

Australia has argued for years that Chinese telecommunications suppliers pose a national security risk because they ultimately operate under Chinese law. The same principle now applies in a broader sense.

The question is no longer whether the technology comes from China or the USA.

It’s about authority.

Ultimately, every technology company operates according to the laws of its own country.

Whether it includes Microsoft’s obligations under the following obligations: US CLOUD ActWhether it’s the restrictions affecting AI services or the geopolitical debates surrounding Starlink, the lesson is the same. Critical digital infrastructure should not become overly dependent on any foreign jurisdiction.

This is not an anti-American argument. American companies continue to lead the world in artificial intelligence innovation. Australia should continue to work closely with them.

However, partnership should not turn into dependence.

The government has also placed great emphasis on the environmental impact of AI data centers and the protection of Australian copyrights.

Both deserve attention.

Data center operators are already investing heavily in renewable energy, higher energy efficiency and recycled water, as these measures increasingly make business sense as well as environmentally. Regulations can reinforce these trends.

Similarly, Australia’s creative industries deserve protection against unauthorized use of their intellectual property.

But these are largely regulatory challenges.

The more strategic question is whether Australia will be the creator of AI talent or simply the place where foreign companies build their infrastructure.

Australia has renewable energy, political stability and attractive locations for hyperscale data centres. These are important advantages. But if our role is limited to providing land, electricity and water, and offshore companies own the AI models, software, intellectual property and customer relationships, much of the long-term economic value will still be created elsewhere.

Australia has experienced this before with many of its natural resources.

We should not repeat the model in the digital economy.

The government has taken an important first step by developing an AI regulatory framework.

The next step should be an AI infrastructure strategy.

Such a strategy will ask different questions. How can we develop the ability to dominate where it matters? How can we ensure resilience when critical AI systems fail or become unusable? How do we reduce dependence on a single supplier or jurisdiction?

How do we maximize the value created by research, innovation and enterprise in Australia?

Energy, water and copyright issues.

But these are not the issues that will determine Australia’s place in the AI economy.

The defining issues are sovereignty, resilience and value creation.

These are the foundations on which Australia’s long-term AI strategy must be built.

Paul Budde IA is a columnist and managing director of independent telecommunications research and consultancy. Paul Budde Consulting. You can follow Paul on Twitter @PaulBudde.

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