Australia unveils AI framework for data centres, copyright and infrastructure

The Australian government has announced plans for a national AI framework centred on new Australian AI Standards, enforceable rules for large AI data centres and stronger protections for creative works.

The framework aims to support AI investment while addressing its impact on energy infrastructure, water resources, local communities, national sovereignty and intellectual property.

Under the proposed standards, large AI data centres would be legally required to underwrite their additional power supply and pay the full cost of connecting to the electricity network. The government said this would prevent AI infrastructure expansion from increasing household energy bills.

Operators would also be required to reduce electricity consumption when necessary to support grid stability and make their facilities as water-efficient as possible.

The federal government plans to work with states and territories on locating large data centres in suitable areas, with local communities given opportunities to contribute to planning decisions.

An Office of AI has been established within the Department of the Prime Minister and Cabinet to oversee the implementation of the Australian AI Standards. The framework will be considered by the National Cabinet in August, with legislation planned for early 2027.

According to the government, the standards will create a consistent regulatory framework for large AI data centres and training infrastructure. It described the legislation as the first government framework of its kind globally.

The framework is also intended to simplify approvals and provide a clearer process for checking compliance with energy, water, safety and other requirements. The government argues that greater regulatory certainty could support investment while ensuring AI infrastructure contributes to Australia’s wider economic and strategic interests.

The framework also addresses copyright. The government said Australian writers, artists and journalists should retain control over their work and that AI companies should not train models on Australian creative content without the creators’ consent.

Further government-wide AI consumer safety priorities are expected to be announced in the coming weeks. These measures will build on the establishment of Australia’s AI Safety Institute.

Prime Minister Anthony Albanese said the framework was intended to ensure Australia actively shapes AI development while protecting national interests, employment and investment.

Industry, Innovation and Science Minister Tim Ayres linked the Australian AI Standards to the government’s wider industrial strategy, arguing that AI investment should strengthen Australia’s resilience, security and economy.

Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton said the framework would create an enforceable social licence for AI and support safer, more inclusive and environmentally sustainable growth.

Why does it matter?

Australia is linking AI governance directly to the physical infrastructure needed to support AI, including electricity, water, land use and data centres, while also addressing copyright and national sovereignty. This represents a broader approach to AI regulation than frameworks focused solely on model safety or transparency.

If adopted, the Australian AI Standards could influence how other countries balance AI investment with infrastructure planning, environmental sustainability and protection of creative industries. The proposal reflects a growing international trend towards integrating AI governance with industrial, energy and digital policy.

Would you like to learn more about AI, tech, and digital diplomacy? If so, ask our Diplo chatbot!