As Australian teenagers know only too well, Prime Minister Anthony Albanese has an exasperating fondness for regulating things.
But the career politician’s move last month to put hard standards around Australia’s booming data centres, while ruling out a copyright carve‑out that would have let tech giants scoop up Aussie content to train their artificial intelligence models, is something we should shamelessly steal.
As Albo pointed out in mid-July, we have a narrow window to set AI’s “social licence”. Once AI infrastructure is built, and the business models are entrenched, it becomes far harder to retrofit safeguards.
We learnt the hard way about social media in the Web 2.0 era, where we took a laissez-faire approach to its rise and ended up drowning in a sea of misinformation, scams and algorithm-driven clickbait. In desperation, Albanese’s government last year rammed through a social media ban for under-16s, which is proving about as useful as prohibition in the 1930s.
AI is too powerful to be left to the same fate. Australia is attracting tens of billions of dollars of AI‑driven infrastructure investment and is starting to feel the backlash over fears of energy‑hungry data centres pushing up power prices and straining local grids.
Australia’s answer is to make data centre operators legally responsible for underwriting new renewable generation to ensure costs aren’t simply dumped on households and small businesses. In other words, if you’re going to plonk a hyperscale AI facility next to a suburb, bring your own clean power and pay your share for the poles and wires.
The second plank of the Albanese approach is equally important. Australia is refusing to hand Big AI a sweeping copyright exemption so it can scrape Australian creative work at scale with no consent or compensation. Tech companies have dangled huge investments and a central artist fund as the price of that exemption. But Albanese’s Labor Party has confirmed it won’t weaken copyright protections to give tech giants free rein and has backed artists in demanding proper deals instead.
The government is now moving to pass into law mandatory AI and data‑centre standards by early 2027 and is establishing a dedicated office of AI within the Prime Minister’s office to co-ordinate AI regulatory efforts.
These are eminently sensible moves. New Zealand is also courting data centre business. Given our cool climate and renewable energy profile, we are an ideal location to run AI workloads.
But new capacity should be green, mustn’t jack up local prices and must contribute to grid resilience. Our media, musicians, writers and film-makers are already struggling with the economics of digital platforms. Making it clear to the likes of Anthropic, OpenAI and xAI that commercial deals must be struck to use Kiwi content for AI model training, and tweaking copyright law to make those deals easier to negotiate, would ensure a fair value exchange.
Businesses hate uncertainty more than anything, which is why the new regulations have been well received across the Tasman. Microsoft, which has pledged to invest A$25 billion in digital infrastructure in Australia by 2029, said, “a single national framework is the right way to ensure all Australians benefit from the many opportunities this technology promises”.
In Australia, as in Auckland, where it has built a data centre, Microsoft has signed power purchase agreements to add renewable energy capacity to the grid to power its facilities. It also recently struck a licensing deal with Australian media giant Nine Entertainment to allow news stories to feature in Microsoft’s Copilot AI assistant. These are positive developments.
Now is the time to be upfront with tech companies and outline the conditions under which we’ll host data centres and protect and reward the people whose content underpins AI models.