Australia risks becoming AI 'import bill' as billions flow offshore, minister warns

Australia faces a growing reliance on foreign artificial intelligence, with billions of dollars flowing offshore annually for AI products and subscriptions, according to Assistant Minister for Science, Technology and the Digital Economy Andrew Charlton.

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Australia faces two tasks in the age of AI. First, use it. Adopt AI everywhere we can, to lift the productivity of Australian workers and Australian businesses. Second, build around it. Create the companies, the capabilities, the intellectual property and the complementary assets that ensure Australians capture a meaningful share of the value AI creates.

Charlton estimates that up to 20% of Australians and one in three businesses are already paying for AI subscriptions, contributing between $5-8 billion per year. He warned that this figure could surge to $20-40 billion annually within a decade, creating a significant import bill for the nation.

Speaking at the Australian National University, Charlton argued that simply building data centers in Australia is insufficient. "We can supply the land. We can supply the electricity. We can host the machines. And still find that much of the value, and many of the economic rents, flow offshore," he stated.

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In effect, we are creating a new import bill.

Instead, he urged Australia to focus on developing its own AI models, which capture the majority of the economic value. Charlton outlined two key tasks for Australia in the AI era: widespread adoption to boost productivity and building domestic capabilities, including intellectual property, to ensure the country captures a significant share of the AI-generated value. He emphasized that AI will not automatically lift living standards without a concerted effort to harness its potential.

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We can supply the land. We can supply the electricity. We can host the machines. And still find that much of the value, and many of the economic rents, flow offshore.