Microsoft Copilot, an American-run software, suggested the response "congratulations!" to Liberal MP Andrew Hastie when he was drafting a reply to a constituent with a terminal illness who planned voluntary assisted dying. Hastie shared this incident at a parliamentary inquiry on Friday, highlighting the software's shortcomings and advocating for Australian-run AI.
The inquiry also heard from Abigail Bradshaw, director general of the Australian Signals Directorate, who stated that her agents require advanced AI daily to defend against "highly capable malicious cyber actors." Bradshaw warned that if digital adversaries have access to more capable AI models, they could exploit system vulnerabilities before Australia can identify them. However, Australia's top cyber-intelligence agency is "entirely reliant" on US-housed processing and would "dramatically" lose capability if cut off during a conflict.
Chris Crozier, the defence department’s chief AI officer, indicated that the government is seeking to localise its technology needs, including contracting Google to build a series of interlinked data centres in Australia, disconnected from the US. The Office of AI, within the prime minister's department, believes bringing AI firms under Australian law would assist local law enforcement in combating threats on these platforms.
The government is planning to establish rules for AI companies operating in Australia, consulting on standards that would mandate reporting of issues and breaches, and potentially reserve computational power for local research. Draft laws on broader AI standards are sought by the end of 2026, according to the prime minister's department.
Copyright law remains an unresolved issue, with AI developers reportedly refusing to train models in Australia without law reform. A proposal to grant companies default access to all Australian online content has faced opposition from creatives. Jenna Priestly, assistant secretary at the attorney general’s department, confirmed that looser copyright laws would also impact AI access to foreign content distributed in Australia, noting the practical difficulty of striking deals with billions of rights holders.