Australia as an AI Middle Power

In September 2023, Australia hosted two events to explore its role in the rapidly evolving field of artificial intelligence (AI). The Australian Strategic Policy Institute (ASPI) hosted an AI Masterclass for national security and defense experts, while the Development Intelligence Lab's Situation 2026 event examined AI's potential to tackle development challenges in the Indo-Pacific region.

These events highlighted Australia's quest to determine its position as a middle power in the age of AI. ASPI founder Jisoo Kim emphasized that Australia must consider its role in the global AI ecosystem as the technology advances at an unprecedented pace. Many Australians might prefer AI had never been invented, but it is now a reality that Australia must confront in terms of its security and prosperity.

Despite this reality, Australia's status as a middle power with a range of assets and resources affords some capacity to influence the new AI-driven world. Assistant Minister for the Digital Economy Andrew Charlton outlined four key strategies for middle powers to navigate AI: aligning with a superpower, leveraging their position in the value chain, competing through different models and capabilities, and developing sovereign capabilities.

Charlton stated that Australia is pursuing all four strategies simultaneously. Shadow Minister for Industry and Sovereign Capability Andrew Hastie echoed these points, particularly emphasizing the importance of Australia's relationship with the United States as a key to sovereignty. Hastie suggested that Australia could encourage hyperscalers to invest in the country by utilizing its relationships with Washington.

However, this dependency on submarine cables and foreign investments could make Australia a "supplicant state," similar to the nuclear race where the U.S. convinced Australia to withdraw from its own nuclear program. Minister for Industry and Innovation Tim Ayres stressed that Australia's aim is not to do everything but to become the "indispensable country" in the AI ecosystem.

Australia possesses unique assets, including policy expertise, talent, trust, and capabilities in chip packaging, quantum computing, and specialized datasets. Additionally, Australia's institutional advantages, such as firms and unions working together for the national interest, bolster its position. The discussions called for Australia to collaborate with other countries, including the United Kingdom, Canada, Japan, South Korea, and India, to collectively address the global AI challenge.

As American Enterprise Institute's Ryan Fedasiuk noted, middle powers can contribute to AI as a global megaproject, maintaining sovereignty by choosing their dependencies. Australia also has opportunities to shape international standards, as highlighted by the Australian Signals Directorate Director-General Abigail Bradshaw and Australian AI Safety Institute head Kate Conroy, both of whom argued that Australia's participation in AI development strengthens its sovereignty and provides a voice in global standards.