Australia's AI Dependency Problem

Rolling Stone magazine once described Goldman Sachs as a "Great vampire squid wrapped around the face of humanity". I suppose it should be JPMorgan now, but actually I think it's US Big Tech and the AI Labs. I woke up Sunday morning to the news that the US government has forced Anthropic to disable Fable for the entire non-US world and I can't shake this feeling that Australia is blindly inviting in a beast it has no way of controlling.

I'm guessing Dario Amodei's visit to Anthony Albanese earlier this year was not intended to warn us of how quickly our access to AI could be turned off. And I'm not saying Anthropic is evil, that America is uniquely sinister, or that Australia has been betrayed. America is behaving like a sovereign country with sovereign interests. Australia is simply a tech illiterate customer confusing access to US technology platforms with sovereign capability.

Does anyone seriously believe that the few companies that had access to Mythos were just using it for the public good and not looking for a commercial advantage? And that the US companies that now have exclusive access to Fable aren't going to try and make hay with their international competitors?

I think a lot of our decision-making is still based on outdated neoliberal ideals. We tell ourselves that different countries can be good at different things, markets and free trade will balance it out. The US AI Labs can own our AI, we can use it to make business and government more efficient, and we'll all prosper as a result. But just look at how the money flows - has anyone in the world figured out how to fairly tax the tech multinationals? What are the chances that any government (other than the US) could actually do this?

Fully sovereign models (meaning we train the base model) aren't going to help us either. Europe has been trying that, and by most accounts they aren't anywhere close to the current open-weight models, let alone the US frontier models. And even if we could train a half-decent one, could it ever keep pace with the investment from the US and China? I'd bet money that world models and self-building AIs will have obsoleted it before the training even started.

But that doesn't mean dependency is the only option. The centre of gravity in tech has moved from software to compute, and compute is increasingly just energy. Australia should have an advantage here, but if we let another country control access to the models we use, we will not own the platforms, we will not own the capital stack or our intellectual property, and in many cases we won't even own the infrastructure in any meaningful sense.

Australia can adopt policies that encourage Australian businesses to do this work rather than defaulting to the US multinationals. We can support Australian self-sufficiency in the areas where it is practical to be self-sufficient. Australian-owned data centres, Australian-operated secure cloud environments, open-weight models, open-source platforms, procurement rules that require portability and data exit rights, and using Australian owned companies, with onshore workforces, to build government and private-sector solutions that squeeze out our dependence on US technology platforms. That is absolutely achievable right now in a way that has never been possible before. Yes, we might have to use models that lag 3-6 months behind the capability of the US frontier models, but these models are already more than capable of writing the platforms that will strangle out systems like Salesforce, SAP and Dynamics where licensing costs have metastasised unchecked through enterprise and government.

We are never going to stop the tech multinationals trying to win work here, nor will we ever get them to pay much tax. We are not going to outspend the US, outscale China, or build a frontier model that magically keeps pace with the largest capital mobilisation in technology history. But we can choose to spend a lot more of that money within Australia. AI has made complex software engineering magnitudes faster and cheaper to build, easier to adapt and no longer so dependent on the multinational tech vendors and consultancies. But we need government policy to support this, and company boards that have the expertise to weigh up the long term risk of these dependencies, and understand what is now possible in Australia.