Anthony Albanese announced plans to make it a legal requirement for AI data centres to underwrite new energy generation, along with the creation of an AI office within his department, in a major speech on Wednesday.
Speaking in Sydney, Mr Albanese compared AI's impact on society to that of commercial air travel 100 years ago.
He promised to take a leading role in the AI rollout after months of pressure from the tech industry and advocates concerned about the rapid shifts in the global economy, declaring an end to the government's current case-by-case approach.
Mr Albanese vowed to pass legislation on mandatory standards for AI by early 2027, following a national cabinet process with state and territory leaders.
Expectations for large AI data centres, released by the government in March, would be strengthened with legislation requiring developers to underwrite new power supply.
It would ensure that no costs are passed onto homes or businesses and at least as much energy is put back into the grid as they take out of it.
Australia could not turn back the clock nor press pause on AI, Mr Albanese said.
"That would only mean cutting ourselves off from the opportunities which are there to be seized and leaving ourselves open to the risks created elsewhere," he said.
"The fact that we cannot stop change does not render us powerless. Far from it.
"Our power, our agency, our choice lies in embracing change and shaping it. Not just adopting or accommodating AI; designing it, making it, building the capability right here, and building our sovereignty and our economic resilience as a result."
Australia was moving on AI early, which meant it could set the terms and determine AI's social licence, he said.
Mr Albanese also pushed back on calls from AI companies to water down copyright laws.
"No company should use Australian books, music, art, or news to build or train AI without the artist's control, and that includes the artist's control of the price and value of their work," he said.Â
"Anything less is theft."
Getting the framework right will enable faster approvals and make Australia a more attractive destination for international investors, he said.
Ahead of the speech, Opposition Leader Angus Taylor said the plan to creat an AI office would just create more bureaucracy.
"The first reaction should be to make sure Australia is secure, getting access to the very best AI for cyber defence," he told reporters in Sydney on Wednesday.
But assistant minister for science, technology and the digital economy Andrew Charlton said the prime minister was bringing national leadership to the issue.
Independent MP Allegra Spender said there was significant concern in the community about AI's impact on privacy and children, arguing the government should have acted sooner.
"It is right that the government is trying to be more on the front foot on AI. Frankly, I wish they had done this earlier," she told Nine's Today Show.
Labor MP Ed Husic, a former industry minister, said it was good to see the government finally acting on the risks of AI.
"Sometimes I'm shaking my head ... we deliver a faster response to dangerous strawberries as opposed to the dangers of high-risk AI," he told ABC Radio Sydney, referencing the Morrison government's attempts to crack down on people placing needles in supermarket strawberries in 2018.
"There's a range of different areas where AI can pose a risk, and we can't have a sort of - as I've previously said - a whack-a-mole approach," Mr Husic said.
