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By Bridget McKenzie November 8, 2026 - In Australia, federal parliament will make a series of important decisions over the coming months that will help define national standards for large artificial intelligence data centres. Australia is competing for some of the largest capital investments ever made, as the hyperscalers and AI labs decide where to build. We need to think seriously about how Australia participates in the AI revolution because the choices we make now will shape our society, economy, and environment for many decades ahead.
An AI joint select committee is also examining the opportunities and risks AI poses, from harm to our creatives and culture, to the safety of children and the threat of foreign interference.
More than a year ago, I warned that, in our pursuit of economic gains, we risked losing sight of our humanity – dismissed at the time as alarmist, even dangerous. Yet geostrategic developments and the race between the US and China have moved at such speed that even AI industry leaders such as Dario Amodei and Sam Altman are cautioning about the pace of change.
Indeed, the AI paradox is that nobody can say with confidence whether Australians will be better off living with AI in 20 years. But we can say with some confidence that a country that declines to take part will be worse off.
AI is already ordinary. People use it to plan a holiday or to help write a speech for a friend’s wedding, and farms, small businesses, schools, and hospitals are building it into their work. But for all the talk about what AI can or might do, it runs on something very physical: big sheds that need vast amounts of capital, power, water and land to sit on.
The standards being written now are our chance to set conditions that will properly provide for long-term energy security. That means two things: not shutting down the firm power we already have over the next few years and lifting the ban on a zero-emissions technology that can supply power at scale for decades to come.
The prime minister’s principle that data centers should fund their own power supply is sound, but his focus on one source is misguided. Households, already groaning under Labor’s renewables ambition, should not be underwriting the compute of trillion-dollar technology firms.
The Albanese government sees AI as the panacea for productivity gains in the economy. For their part, AI companies want speed, certainty, scale and trust. That means firm supply they can connect to quickly and rely on around the clock for the life of the facility.
They also want to build in a country they trust as a security partner because the chips and trained AI models they are deploying are now treated as strategic assets.
As a Five Eyes ally, Australia starts with an advantage that most of our competitors for this capital cannot match. Yet our governments are allowing about five gigawatts of coal and gas generation at Yallourn, Eraring and Torrens Island to leave the grid before 2030 at the very moment we are inviting these energy-hungry investors in.
Australia is also dictating which power technologies they are permitted to bring. Nuclear power generation remains prohibited under federal law. A data centre operator that might be willing to fund, build and own a zero-emission modular reactor is prohibited from even contemplating it. Nuclear plants take many years to approve and build, which means every year the ban stays in place pushes the first plant further out.
The result is that new demand will land where it always lands – in our backyard. More industrial-scale energy projects across regional Australia, more impacts on local communities and on water resources, more tension over how that infrastructure is built.
Few players come to this debate entirely pure.
A Liberal prime minister, John Howard, accepted the prohibition in 1998. Labor supports nuclear propulsion at sea but not nuclear power on land. One Nation helped torpedo a national radioactive waste facility at Kimba in South Australia.
Globally, the non-nuclear club is shrinking fast.
Google, Microsoft, Amazon and Meta, hungry for electricity, have all entered major nuclear power arrangements. Australia holds the world’s largest known uranium resources yet hypocritically exports every tonne it mines to the reactors of other nations.
Overseas, there is bipartisanship on this issue: Labour and Conservatives in the UK, the Republicans and Democrats in the US, and the Finnish Greens back nuclear as sustainable energy. An unlikely authority here is Pope Leo XIV, whose first encyclical challenged societies to think more carefully about how technological progress is sustained.
Lifting the moratorium mandates nothing and subsidises nothing. It simply permits a future transaction between willing parties that is becoming increasingly common overseas.
Bridget McKenzie is a speaker at Monday’s Australian Financial Review Infrastructure Summit.
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