Sovereign Artificial Intelligence: Warnings that overreliance on foreign AI models will endanger Australia

Australia’s defence, intelligence and infrastructure are vulnerable to attacks as a result of the nation’s overreliance on foreign artificial intelligence models.

The grim warning came from several experts, including AI heavyweight Simon Kriss who said Australia was at risk of espionage, sabotage, or cyberattacks if it didn’t prioritise building a sovereign AI foundation model.

With the upcoming Federal productivity roundtable pushing AI into the forefront of national debate, Mr Kriss was among several experts urging the Albanese Government to prioritise sovereign artificial intelligence.

His warning was echoed by former senior army officer turned academic Ian Langford, who said digital infrastructure was currently Australia’s defence blindspot.

Professor Langford said Australia recognised the importance of AI for the future but the conditions weren’t right to adapt, with infrastructure, public and private investment, political will, and the skills pipeline all needing to step up.

“In Australia, I think we recognise that we need to do it, but we just can’t apply ourselves in that context yet,” he said.

“We need the government to be able to set the conditions for these investments in these technologies to be able to be accessed.”

A growing number of countries have jumped to create sovereign AI foundation models, including China, India, Singapore and several European nations.

Canada is among those taking steps towards a sovereign system, announcing a $2 billion into a Sovereign AI Compute Strategy.

Professor Lanford said international governments who supported the industry were helping their nations accelerate in the global digital race.

He pointed to the EU’s €500 billion (nearly $900 billion) research and innovation funding program, the “European Horizon Fund”, as an example of governments jumping on the opportunity.

Professor Langford said Australia needed to urgently follow suit and onshore some of the technologies.

“In Australia, we’ve got the national Reconstruction Fund, but it hasn’t yet really activated around some of those AI priorities,” he said.

“We’re not really thinking in a way that we should around how we’re organising ourselves, and that includes things like power, people, and critical infrastructure.

“The creation of a technology ecosystem is what needs to happen in Australia. That’s everything from onshore data centres, high-performance computing, training and education pathways to build the future workforce that we need.

“And also government support and investment to allow early start-ups and early phase companies to be able to manage risks as they scale and build the kind of capacity that we see in other countries.

“The Government needs to build the ecosystem to encourage private investment to build the workforce and to recognise the criticality of what will essentially determine how successful we are in the global system in the years ahead.”

Professor Langford said apart from defence infrastructure, outside malicious actors could also threaten to penetrate Australia’s banking and commercial systems.

“It’s as important as having your own defence force,” he said.

“It’s as important as having your own health and financial systems infrastructure.”

In a National Press Club address late last month, Atlassian billionaire Scott had called for Australia to play a world-leading role in the development of data centres.

Mr Farquhar, who now serves as chairman of the Tech Council of Australia, said he envisaged Australia hosting “digital embassies” where foreign nations could store their sensitive government data on our soil — but under their own foreign laws.

He argued Australia was uniquely placed to become a Southeast Asian hub for data centres, thanks to sparse land, talent density, resources access and comparatively cheap green energy.

Professor Langford agreed with Mr Farquhar’s proposal, saying the Australia government also had an opportunity for “leadership” in the Indo-Pacific - to help smaller resource-lacking nations to establish data centres and AI infrastructure.

“So imagine a country that is at risk of climate change,” he said.

“Some of the micronesian countries in our region would have less ability to have the power and energy infrastructure to power data centres. Australia can do that. Australia needs to step up and really be responsible for that if it wants to be a leader in the decades ahead.”

Data centres accounted for around 1.5 per cent or 415 terawatt-hours of the world’s electricity consumption in 2024, according to a report released in April by International Energy Agency report. The outlook predicted it to double to 945 TWh by 2030.

Mr Kriss said in the context of climate policy in Australia and with our smaller regional nations - many of whom we hope to host the COP26 climate summit with next year - AI needed to be in the mix.

“What is our current plan to be able to build those data centres in the context of energy and even climate policy? That is a really important part of the conversation that should feature the productivity roundtable.”

Mr Kriss said Australia could also be beholden to foreign government agendas and values which don’t align with Australian economic and cultural sovereignty if there was an overreliance on their models.

He flagged US President Donald Trump’s vow to stamp out “anti-woke” from US models as an example.

Mr Trump had signed a trio of executive orders in July in his push to transform the United States into an “AI export powerhouse” but he also vowed to end “woke Marxist lunacy in the AI models”.

“We are getting rid of woke,” he declared, revealing a new order would give funding to firms which maintained politically neutral AI models.

“We need US technology companies to be all-in for America. We want you to put America first.”

Mr Kriss said there were multiple layers to the AI cake, which people didn’t initially think of beyond the application layer users interact with.

He said while there were a couple of Australian foundational models for image generation, such as Leonardo.Ai, we hadn’t established a foundational large language model.

“Do we want an Australia where the basis of our AI is a set of American president’s values? Or do we want the values that we have,” Mr Kriss questioned.

He also said Australia had limited graphical processing units, meaning that while data can be stored in Australia, requests fed into AI platforms often had to be processed in other countries.

Most of the world’s most notable large language models, including Google’s Gemini and OpenAI’s GPT, are developed and trained in the US.

A Stanford University-led 2025 Artificial Intelligence Index Report found China is leading the world in AI research while the United States continued to be the leading source of notable AI models.

Despite not cracking a mention in the top AI-leading nations, Australia topped the Index report’s list of countries where people say AI makes them nervous - with 69 per cent of Aussies airing concerns, compared to tech-advanced Japan, where just 23 per cent of respondents agreed.

Mr Kriss, who works with advisory boards and across city C-suites, said there was a lack of trust across Australia.

He said better AI literacy in schools and workplaces, as well as having Australian-built, controlled and biased AI would help address the trust issues and ultimately drive better adoption.

“We need a kindergarten to Year 12 digital capabilities plan like China, the UK, the US all have. But we also need greater AI literacy in our existing executives, C-Suites and boards,” he said.

Monash University Professor Geoff Webb said while he didn’t believe Australia needed an entirely domestically built and operated platform, he agreed the nation needed to strengthen “sovereign capabilities” across all sectors.

He said before debate started on a fully self-contained “sovereign system”, Australians needed to upskill and update infrastructure to better understand, develop, control, and adapt to systems.

Professor Webb also urged TreasurerJim Chalmers to prioritise sovereign AI at the roundtable, saying Australia ran the risk of being “eaten alive by AI” and called for an urgent uplift in capabilities.

Mr Farquhar had also called for every Australian, in every sector to start using more AI in their day-to-day lives and become familiar with the technology, warning if people shunned adoption they risked falling behind.