Australia develops AI data center and power grid policy framework amid growing electricity demand.
On 12 June, every Australian quietly lost access to Anthropic's Claude Fable 5, the most capable AI model on earth. No warning. No negotiation. The model simply went dark. And the cut didn't come from Beijing or Moscow—it came from Washington, our closest ally, which cited its own national security. A single U.S. directive, and Anthropic suspended foreign access that evening.
We are racing to embed AI into critical government services and industries. Once it runs the machinery of the state, a foreign off-switch becomes a vulnerability. Three moves would change that: treat computing power as critical national infrastructure, require global tech giants building data centres here to reserve a share of that capacity for Australia, and build an AI model we own and run ourselves.
France saw the same dependence and built its way out. Three French researchers from Google DeepMind and Meta founded Mistral in 2023. Within two years it was Europe's most valuable AI company and the continent's answer to OpenAI. They released capable models with open weights that anyone could download, inspect and run on their own servers. In December 2025, the French Ministry of the Armed Forces signed a framework agreement for Mistral to supply AI services across the defence establishment, from the armed services to the atomic energy commission and the navy's hydrographic office. The non-negotiable conditions were that everything had to run on French-controlled infrastructure and that data would never leave national jurisdiction. Paris backed that demand with capital and sent a clear signal to its institutions to buy French, within a national AI push pledged to grow to €109 billion (A$180 billion).
France didn't try to build the most advanced model—a race it would have lost. It built its own capable models instead: not quite at the frontier, but powerful enough to run a government and an economy, and entirely under French control. The frontier labs will always be a step ahead, but the meaning of a shutdown changes when you have a model you control. It is the difference between a cut-off that inconveniences you and one that incapacitates you.
The same capability is within Australia's reach: sovereign capacity through homegrown models running on secure servers under Australian law. The federal government should start by treating computing power as critical national infrastructure. If AI is the engine of the new economy (both public and private), computing capacity is the fuel it runs on. We need to define the set of essential systems—core government, the payments system, grid control, defence—that must stay active through any external shock. Next, we can secure cooperation from the tech giants poised to invest close to a trillion dollars annually. They need sites for data centres with power, permits and political certainty. We should compete hard for the investment but set terms: a guaranteed share of data-centre computing power reserved for Australian use, unclaimable when a foreign government or Silicon Valley headquarters changes its mind. Lastly, we can take a cornerstone equity stake in an Australian developer, enough to keep its weights and decisions onshore. The federal government becomes its anchor customer. And agencies handling the nation's most sensitive data would be directed to run on models hosted on Australian servers, with contractual guarantee that no foreign directive can reach the off-switch.
Contrast that with the plan we have. Released in December 2025, the National AI Plan glows with good intentions: a Safety Institute to keep us safe, pledges to share the benefits, reassurances about carrying workers through disruption. Yet every commitment concerns the AI we use, not whether we'll be allowed to use it at all.
We have learned this lesson before, in harder currency. We keep a strategic fuel reserve because depending on someone else's supply proved a vulnerability. Our reserve of computing power sits at zero. The data centres are going up regardless. The only question is whose they are, and right now that question is being answered for us, cheerfully, by people who haven't grasped that they're answering it.