Australia stands at a pivotal moment in shaping its digital future. As global competition in AI accelerates, Australia must act decisively to secure its digital sovereignty.
Investing in sovereign AI capability – developed, deployed, and governed domestically – is essential to ensure ethical alignment, operational control, and resilience across key sectors such as defence, national security, law enforcement, intelligence, public services, and critical infrastructure.
As Industry and Innovation Minister Tim Ayres recently emphasised, transformational outcomes require collaboration. Sovereign AI development must follow this model – co-designed by government, academia, and the private sector to ensure national alignment and public value.
This partnership can leverage expertise in AI research, ethical governance, and policy development to build robust, sovereign AI systems.
Maintaining sovereign AI capability does not mean rejecting commercial models, nor replicating or competing with the scale of global tech giants. Rather, it ensures that Australia retains the strategic capacity to govern, adapt, and deploy AI systems in ways that serve national interests.
Commercial tools can and should be used where appropriate – but only alongside a sovereign capability that allows for independent development, modification, and oversight when national priorities demand it.
Sovereign AI is essential for preserving strategic autonomy.
Foreign-developed models are often governed by external jurisdictions and trained on opaque datasets, limiting Australia’s ability to ensure alignment with its own privacy standards, legal frameworks, and ethical expectations.
In sensitive domains such as defence, health, and public administration, this lack of control poses unacceptable risks.
Resilience is another critical factor. Global AI supply chains – particularly for compute infrastructure, data storage, and cloud services – are increasingly vulnerable to geopolitical tensions, export restrictions, and cyber threats.
Sovereign infrastructure ensures continuity of service and operational independence during times of crisis.
From an economic perspective, sovereign AI fosters a local ecosystem of innovation, intellectual property, and high-value jobs.
The objective is not to replicate the scale of global tech giants, but to build targeted, domain-specific capabilities that address national challenges and unlock productivity gains across sectors.
Trust and transparency are foundational to public sector use of AI. Sovereign systems enable explainability, auditability, and accountability – qualities that are essential for maintaining public confidence.
Cultural and linguistic relevance is another often-overlooked dimension. Commercial models frequently underperform in non-dominant languages and lack sensitivity to local contexts.
Sovereign AI can be trained on Australian English, Indigenous languages, and culturally specific datasets to ensure inclusivity and relevance in service delivery.
Legal and ethical alignment is also paramount. Sovereign AI allows for full compliance with Australian laws and enables the embedding of ethical frameworks grounded in fairness, transparency, and accountability – rather than inheriting the norms of foreign corporations.
Finally, sovereign capability enhances Australia’s global influence. Countries that develop and govern their own AI systems are better positioned to shape international norms, standards, and governance frameworks. Australia must be a contributor – not just a consumer – in the global AI landscape.
To build and sustain sovereign AI capability, Australia must prioritise a set of strategic enablers that collectively support innovation, resilience, and national alignment. One of the most critical of these is targeted investment.
Establishing dedicated funding streams for sovereign AI research and development – through mechanisms such as government grants, public-private partnerships, and venture capital – will ensure that Australia can nurture homegrown innovation.
Equally important is procurement reform. By prioritising Australian-developed AI solutions in government procurement processes, the public sector can stimulate local innovation and incentivise deeper collaboration between universities, research organisations, and industry.
This approach not only strengthens the domestic AI ecosystem but also ensures that public investments contribute directly to national capability.
Developing robust talent pipelines is essential for sustaining long-term AI growth. Expanding AI education, offering micro-credentials, and facilitating secondments across academia, government, and industry will help build a digitally fluent workforce.
These initiatives will ensure that Australia has the human capital necessary to lead in AI development and governance.
Australia must also invest in national compute infrastructure, including sovereign supercomputing, cloud platforms, and data centres. These components are essential to support the training, deployment, and scaling of domestic AI models.
Recent investments, including the Future Fund’s stake in CDC, signal a strategic commitment to locally governed infrastructure that supports AI, defence, and research. Together, this infrastructure ensures Australia’s operational independence and resilience.
Supporting open-source ecosystems is another key enabler. By fostering the development of transparent, auditable, and locally governed open-source AI models, Australia can promote trust, collaboration, and innovation within its AI community.
Open-source approaches allow for greater scrutiny and adaptability, while reducing dependency on foreign platforms and opaque algorithms.
Ensuring data sovereignty is fundamental to ethical and secure AI development. Australia must establish governance frameworks that support the ethical, secure, and culturally relevant use, and sharing, of data in AI training.
This includes respecting Indigenous data sovereignty and ensuring that datasets reflect the diversity and values of Australian society.
Finally, strategic procurement guidelines should be mandated to embed transparency, auditability, and alignment with national values into all AI procurement decisions.
These guidelines will help ensure that AI systems used in the public sector are not only effective but also trustworthy and aligned with the public interest.
Building sovereign AI capability within Australia is not just a technological imperative – it is a strategic necessity.
The government’s renewed focus on aligning research and development with national priorities – along with its broader commitment to sovereign capability – underscores the urgency of investing in sovereign AI as a strategic enabler of economic and digital resilience.
The government, universities and industry must work together to co-develop solutions that serve the public good, strengthen national productivity, and that are strategically aligned with national interests.
Dr Alex Antic is the Faculty Head of AI Strategy at UNSW Canberra, and Deputy Director of the UNSW AI Institute.
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