Looking to bolster its technology sector with artificial intelligence, Australia is opening its doors to AI developers that are eager to expand into untapped markets.

On Tuesday, tech giant Microsoft said the company is investing AUS$5 billion, around $3.2 billion, into the Oceanic country, according to a report by Reuters. This comes after Google said it would invest $1 billion in partnership with the Australian government.

The Google deal, CNN Business reported, would include projects to protect the Great Barrier Reef and clean energy.

As billions of dollars in investments shore up Australia’s AI capabilities and capacity, some say the regulatory landscape in America is meanwhile forcing AI developers to seek greener pastures in other regions.


Australia's fortunes are benefitting from the increasing regulatory headwinds for AI in the U.S., said Shanal Aggarwal, Chief Commercial Officer at application developer TechAhead.

"The rules and regulations around AI in the U.S. are still a bit unclear. This uncertainty can make it hard for AI developers to know what they can and cannot do,” Aggarwal told Decrypt.“When rules are too strict or confusing, it can push the AI developers to work in other countries instead of the U.S. because other places might have clearer and more flexible rules.”

Although he acknowledged the need for regulation, stricter rules for AI developers, Aggarwal cautioned, could also constrain growth during a critical time for the nascent technology.

“It's important to have rules that ensure AI is used safely and responsibly but not so many rules that push all the AI work away from the U.S.," he said.


After generative AI came into the mainstream with the introduction of ChatGPT last year, it has been adopted across several industries. However, questions surrounding how AI models are trained, where the data is stored, and copyright infringement have dogged the industry.

A 2022 report by the International Data Corporation said Australia is on track to spend up to $3.6 billion on artificial intelligence.

The deal between Microsoft and the Australian Government will increase the number of data centers in the country from 20 to 29 throughout Canberra, Melbourne, and Sydney.

Microsoft said the company is also working with Technical and Further Education New South Wales (TAFE NSW) to establish a new learning center called the Microsoft Datacentre Academy to help 300,000 Australians learn the skills they need in the new digital economy. The company said it would also invest in Australia’s cyber defense infrastructure.

“This is a major investment in the skills and workers of the future, which will help Australia to strengthen our position as a world-leading economy,” Australia Prime Minister Anthony Albanese PM said in a prepared statement provided to Decrypt. “A priority for my Government is to ensure all Australians benefit from economic growth. This means that we need to provide the skills to enable Australians to succeed in the jobs of the future.”

Earlier this month, The Guardian reported, Australia’s federal education minister Jason Clare said students could use OpenAI’s ChatGPT in school beginning next year. Microsoft has invested heavily in ChatGPT, including a $10 billion investment and integrating ChatGPT into its Bing internet browser.

“We’ve got to learn how to use it,” Clare said. “Private schools are using it now. Kids are using it right across the country, they’re using it to do their homework … we’re playing catch-up, to be honest, here.”

Edited by Ryan Ozawa.


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