AI rules built for the Top End: What Canberra's 'AI in Australia's interests' push means for Darwin and the NT

The Northern Territory is poised to play a strategic role in Australia’s next technology chapter with Canberra’s latest announcement on ‘AI in Australia’s interests’ focusing on energy‑intensive data infrastructure. The Prime Minister’s speech and accompanying press release set out a national direction intended to attract frontier AI investment while protecting communities, critical resources and creatives, an agenda with clear implications for the NT.

What was announced and why now?

AI Standards

The Australian Government has announced that it intends to introduce a ‘world-leading artificial intelligence framework’, including a set of mandatory Australian Standards for AI (AI Standards). The announcement builds on the Government’s National AI Plan published last December, which set out the Government’s approach to building an AI-enabled economy. While light on detail, we set out below some of the key takeaways from the latest announcement.

Data centres

Data centres feature strongly in the announcement, with the AI Standards set to build on the ‘Expectations of data centres and AI infrastructure developers’ document issued by the Government in March of this year. That document set out a series of expectations on AI developers looking to operate in Australia, including in relation to national security and data sovereignty, assisting with Australia’s data transition, sustainable use of water, investment in Australian skills and workforce, and contribution to research and innovation. 

The AI Standards will set rules for large data centres, including obligations for operators and developers to:

• underwrite new power supply for data centres, including paying their full share of grid connection costs
• reduce power when needed to strengthen the grid
• build new renewable energy generation capability
• ensure water efficiency and pay for additional required water infrastructure, and
• be 'net-generators' of power, requiring them to put as much power into the grid as they use.  

In addition, the Government will work with states and territories and engage with local communities when deciding where to locate data centres.

The Government’s intention is to consolidate earlier expectations for data centres into a single, clear and mandatory regulatory framework, while accelerating approvals and the process for verifying compliance with energy, water and safety requirements.  

This of particular relevance for the NT which has seen significant data centre investor interest in recent months, driven by government initiatives and fragility of energy security in the Middle East. Introduction of the AI Standards will likely see new large‑scale data infrastructure proposed for the NT needing to factor in new power under‑writing, full connection costs and water efficiency obligations.

Office of AI

In parallel, the Office of AI has been created within the Department of the Prime Minister and Cabinet to accelerate implementation of the AI Standards and to coordinate work across portfolios, including copyright, energy, education, employment and national security. This signals a more proactive and hands-on approach from Government, after stepping back from plans to implement mandatory AI standards for high-risk AI first proposed in September 2024. 

Copyright protections

The Prime Minister also committed to the ‘strongest possible protection’ for Australian artists and media, making clear that no company should train AI on Australian books, music, art or news without the artist’s control and the ability to set price and value. This maintains the Government’s opposition to a text and data mining exemption to copyright laws for AI developers seeking to train their models. 

AI consumer safety

In the announcement the Government also indicated that it would outline its AI consumer safety priorities in coming weeks, building on the recent establishment of the AI Safety Institute.  These priorities were subsequently announced as including:

• Duty of Care: Legislating a Digital Duty of Care that puts the onus on AI companies to build in safety by design and proactively address potential harm.
• Privacy: Consulting on a second tranche of privacy reform to responsibly strengthen, modernise and simplify Australia’s personal data protection laws.
• AI Safety in the Workplace: Pursue AI safety in the workplace.
• Consumer Protections: Examine options in Australian consumer law to address consumer risks, such as retail surveillance pricing and agentic commerce.
• Framework for automated decision-making: Develop a framework to better regulate the use of automated decision-making within federal agencies, recognising the importance of ensuring fair, accurate and transparent government decision-making.

Where to from here?

National Cabinet will consider the approach later this month, with legislation aimed for early next year, signalling a near‑term timetable for statutory change.

While much of the detail is still to be built out, it is clear that if the Government is to achieve its intention of establishing a ‘world leading framework…to shape the future rather than letting the future of AI shape us’, the NT will no doubt play a pivotal role in that push.