If Australia is poised to become a hub for artificial intelligence, it must not squander the opportunity. Instead, the nation should forge a distinct path that ensures shared prosperity, argues Peter Lewis.
Tech Titans Eye Australia
CEOs of major AI companies like Microsoft and Anthropic are engaging with Canberra, seeking secure locations to train their massive models. Having exhausted public tolerance in the US for data centres and their high energy and water consumption, these firms require stable bases with access to space, renewable energy, and political stability—resources in short supply globally.
Assuming AI is neither an unsustainable bubble nor a harbinger of social breakdown, Australia could produce artificial intelligence much like the Middle East produces oil. However, this industrial-scale rollout demands significant energy and social licence from an increasingly sceptical public.
Learning from Norway
Peter Lewis suggests taking a leaf from Norway’s playbook. Norway’s sovereign wealth fund, built on North Sea oil discoveries in the 1970s, exemplifies valuing national resources to benefit the people. Designed as a co-investment with industry, it captures benefits via taxes, licences, and dividends, now worth over A$3 trillion.
In contrast, Australians face rising energy prices while questioning why the thriving gas industry operates under different rules. From David Pocock to Pauline Hanson, there are calls for a different approach. The Hawke government’s decision not to be an upfront investor in gas deposits is now widely seen as a mistake, but resetting gas taxes during a global energy crisis is difficult.
Designing Financial Arrangements Upfront
The lesson from Norwegian oil and Australian LNG is that financial arrangements for new industries must be designed upfront. However, at the start of a boom, it is impossible to predict whether it will be a gold rush or a barren dig. All one can do is make a calculated bet.
Australia now holds an extra bargaining chip: AI models are built on what some call a criminal enterprise. Court cases have established that hyper-scalers systematically and illegally scraped the web to train models. Scott Farquhar of the Tech Council proposed a data mining exemption to copyright, but backlash forced a retreat.
Call for Reparations and Licensing
Lewis argues for holding the line on copyright, requiring reparations to creators and ongoing licensing of their work. But more is needed: an AI sovereign wealth fund demanding a significant, continuous share in profits from companies training models in Australia, including value derived from models used elsewhere.
Such a fund could support creators whose work is erased and provide ongoing funding for workers displaced by AI. By partnering rather than regulating and taxing, Australia could also control the technology’s direction, ensuring compliance with local laws.
Global Precedents
This idea is not unprecedented. South Korea is exploring an AI profits fund to support startups, creators, and social safety nets. US think tanks have floated a “token tax” akin to GST on AI usage. However, limiting to taxation risks manipulation by global capital flows and accounting tricks. A genuine co-investment, recognising data centres as a public resource, would embed joint benefit in a way Australia has never achieved.
Planned well, this partnership could work. Australia going all in on data centres would solve an existential problem for Big Tech. Building renewable-powered infrastructure that shares output globally could create a new green export industry.
Former Treasury secretary Ken Henry, who designed the ill-fated mining tax, notes that Australian reticence in taxing resources goes back to the Eureka Stockade: prospectors believe they own what they dig up. A different future could see Australian-trained AI, powered by renewables and respect for human creation, as the gold standard in machine learning—a resources boom built on solid Norwegian wood.
Peter Lewis is the executive director of Essential, a progressive strategic communications and research company. He hosts the Burning Platforms podcast.
