Artificial intelligence companies will have to abide by new "mandatory" safeguards when operating in Australia, Prime Minister Anthony Albanese said Tuesday.
Global unease about the power of advanced AI is growing after a string of hacking incidents involving leading companies such as OpenAI and Anthropic.
Australia would establish a new AI safety regulator tasked with implementing measures designed to keep the booming industry in check, Albanese said.
"Our task is to make sure that we shape AI, rather than AI shape us," Albanese told reporters.
"You can't turn it off and pretend it isn't happening. But what we can do is make sure you shape it in Australia's interest."
The measures would include "mandatory" reporting of AI security breaches and the independent evaluation of frontier AI models, Albanese said.
"Australia is a first mover in this space and we want to make sure that we reap the potential benefits of AI," said Albanese.
"But we need to ensure that we get it right, and social licence is absolutely critical."
Australia voiced deep unease earlier this year after a prototype OpenAI model bypassed safeguards during training and hacked into a government website.
The model sought access to a health statistics portal in June, sidestepping restrictions to breach a section hosting private files.
OpenAI did not raise the alarm with the Australian government until September, when it sent a message to a generic email inbox that is only checked once each day.
Defence minister Richard Marles said AI companies should open themselves to external scrutiny to make sure their tools are safe.
"There needs to be greater risk management of AI capabilities," he told reporters.
"It's important that there is independent assessment of AI models."
Marles said it was pointless to pretend that AI would not reshape the world.
"This is not a technology that we can run away from.
"AI is part of our lives today and it will only grow as part of our lives going forward."
With immense renewable energy potential and vast stretches of uninhabited land, Australia has billed itself as a prime location for the data centres needed to power artificial intelligence.
OpenAI is involved in the construction of a massive data centre on the outskirts of Sydney.
But AI companies also face a growing local backlash, as many Australians question their ethics and the environmental footprint of their power-hungry data hubs.
A major point of contention is whether Australia will water down its copyright laws so that chatbots can be trained on songs, books and other works of art.