A New Era for AI Governance in Australia: What the National AI Plan Means for Industry

On 2 December 2025, the Australian Government unveiled the National AI Plan 2025 (Plan), its most comprehensive statement to date on how it intends to support Australia to shape and manage the rapid expansion of AI technologies. This is not just another strategy document – it is concrete confirmation that AI is a core economic, regulatory and political priority for Australia. The Plan lays the government’s approach to infrastructure, innovation, skills and regulation designed to support an AI enabled economy.

For organisations operating in or into Australia, this Plan sets the direction of travel for investment, regulation, workforce policy and government procurement over the rest of this decade. While it does not itself create new legal obligations, it tells you where the law and regulators are heading, and how public funds will be deployed.

In this article, we unpack the Plan from a commercial and regulatory perspective, and suggest practical steps organisations could be taking now.

1. The big picture: "AI for Australia"

The National AI Plan is organised around three themes that will shape the government’s policy, regulation and investment over the coming decade, The three goals at a glance are:

• Capture the opportunities: investment in compute, data centres, connectivity and local AI capability.
• Spread the benefits: support for SME/NFP adoption, workforce skills and AI-enabled public services.
• Keep Australians safe: reliance on existing laws supplemented by targeted reforms and the creation of the AI Safety Institute (AISI).

For organisations, the message is clear: AI is now considered critical national capability. Expect more public investment and procurement activity, alongside heightened expectations for responsible governance and transparency. Companies should expect regulators to ask not only whether AI is used, but how it is governed.

2. Infrastructure & investment – opportunities and conditions

The government intends to provide support for Australia to become a regional AI and data hub. Data centre investment commitments by companies are forecast to exceed A$100 billion, supported by strong renewables capacity, geopolitical stability and strategic connectivity through Indo-Pacific subsea cables. To guide this growth, the government is developing a set of national data-centre principles in partnership with the states and territories which set expectations on sustainability, energy system impacts, water efficiency and national-security considerations.

Commercial implications:

• Providers aligned with the new data centre principles should benefit from an approvals pathway that is more coordinated with states and territories, but with firmer expectations on environmental and security standards.
• Large AI users may be encouraged to deploy compute in Australia to meet sovereignty and security expectations.
• Energy providers should anticipate increased AI-driven load and opportunities for long-term supply arrangements.

The Plan also signals a tighter alignment between AI and the Future Made in Australia agenda. Domestic capital (including superannuation funds) is expected to play a significant role, while foreign investment in critical digital infrastructure will continue to be scrutinised for national interest and security risks.

3. Local capability, data and IP – building and selling into the ecosystem

More than A$460 million in existing AI-related government funding is being consolidated, alongside a new "AI Accelerator" funding  round of the Cooperative Research Centres (CRC) program. Initiatives such as the GovAI hosting service for government agencies, the expansion of the National AI Centre (NAIC) , and export-support programs indicate that government intends to be a major supporter and co-developer of AI systems in health, education, agriculture, resources and public administration.

For vendors, this means government procurement  is likely to consider:

• solutions built to Australian standards for safety, privacy and explainability; and
• models tailored to Australian linguistic, cultural and legal context.

Data as a strategic asset

The Government is exploring opportunities to unlock high-value public datasets for AI training and  for accessing large unstructured datasets and (with guardrails) private-sector data. This will necessitate new data-sharing and licensing models with careful attention to privacy, confidentiality, competition law and IP allocation. Organisations with valuable datasets may gain new monetisation opportunities but must manage:

• privacy and re-identification risk;
• Indigenous data sovereignty; and
• cross-border transfer and localisation considerations.

4. AI adoption, workforce and workplace regulation

The Plan acknowledges persistent digital exclusion and uneven AI adoption across regions and communities. To address this, the Government is consolidating SME and not-for-profit support within the National AI Centre, extending First Nations support initiatives, and accelerating AI uptake across the public service through GovAI, introduction of Chief AI Officers in every agency and strengthened automated decision-making legal frameworks. To this end the AI Plan for the Australian Public Services was release on 25 November 2025.

AI, skills and industrial relations

A major theme is the need for lifelong learning and broad AI capability uplift across the workforce. Initiatives include VET and TAFE programs, microcredentials, and the Next Generation Graduates Program. The Plan emphasises a strong role for worker consultation and union engagement.

Implications for employers:

• consultation is recommended wherever AI affects rostering, monitoring, performance, recruitment or work allocation;
• Safe Work Australia's best practice review suggests forthcoming WHS guidance on AI-safety such as psychosocial and monitoring risks;
• transparency and safety will be  key concerns.

Global organisations should ensure that Australian-specific workplace expectations—particularly around transparency and consultation—are reflected in local AI-at-work policies.

5. Keeping Australians safe – the emerging regulatory architecture

The Government intends to leverage existing technology-neutral laws while introducing targeted reforms. Agencies and regulators will retain responsibility for identifying, assessing, and addressing potential AI-related harms within their respective policy and regulatory domains. Central to this is the AI Safety Institute (AISI), which will assess upstream risks (capabilities, datasets, system design) and downstream harms, support specialist regulators, and coordinate major incident responses. It is likely to become a practical reference point for "what good looks like" in AI testing and documentation. 

Beyond AISI, the Plan highlights significant regulatory activity already in motion, including:

• Privacy law reform, with direct implications for profiling, automated decision-making and data governance.
• Consumer protection and product safety, confirming AI systems fall within existing guarantees and safety rules.
• Online safety, including proposed enforcement tools for deepfakes, nudify apps and AI-facilitated harms.
• Copyright, where the Government has ruled out a broad text-and-data-mining exception.
• Sectoral regimes, including health, medical devices, finance and critical infrastructure.

The overall message is that AI is already regulated. Future reforms will be aimed at applying fit-for-purpose legislation, strengthening oversight and addressing national security, privacy and copyright concerns. 

6. Responsible AI practices and transparency

The Plan reinforces responsible AI as a shared obligation. NAIC's Guidance for AI Adoption , the Policy for the Responsible Use of AI in Government  and guidance on AI-generated content set out guidance for governance, documentation and transparency. While non-binding, these materials will influence regulatory interpretation.

Boards and executive teams should ensure:

• clear governance structures and accountability for AI use;
• documented risk assessments for higher-impact systems;
• strong vendor due diligence and contractual controls;
• monitoring and incident-response processes; and
• transparent communication with users and employees where AI supports significant decisions.

7. Global norms and cross-border operations

Australia is deeply engaged in the global AI governance landscape through the Bletchley, Seoul and Paris commitments, the Hiroshima AI Process, GPAI and the international network of safety institutes. Bilateral initiatives with Singapore, the US, UK, India and Korea will further shape expectations around AI security, transparency and interoperability. Multinational organisations should expect Australia to pursue compatibility—though not full alignment—with global regimes, and may still need to tailor AI products to Australia's privacy, copyright and online-safety requirements.

8. How organisations can prepare now

• Map AI use across products, operations and workforce tools.
• Strengthen governance with clear executive accountability.
• Stress-test compliance across privacy, consumer, competition, IP, WHS, employment and sectoral laws.
• Refresh contracts with AI vendors and data partners.
• Prepare for transparency, including labelling AI-generated content where appropriate.
• Engage early with NAIC, AISI and government consultations shaping future standards.

Final thoughts

The Plan is not a rulebook but a strategic roadmap showing where regulatory scrutiny, funding and policy attention will intensify. Organisations that embed AI into their governance, legal and commercial frameworks now will be best placed to capture emerging opportunities whilst managing risk. Please contact us for any queries about the Plan. We are able to assistance with AI audits, governance design and localisation of global AI strategies for the Australian regulatory environment to comply with existing laws and new regulation as they emerge.