‘Vital national security asset’: Treat data centres like oil rigs

OpenAI warns that Australia needs to start treating data centres as assets and says it risks being left behind by the rest of the globe on AI.

Words by Noah Yim and Matthew Cranston for The Australian

The world’s premier artificial intelligence company warns that Australia needs to start treating data centres as assets – as important as oil supply and munitions factories – and says it risks being left behind by the rest of the globe on AI.

OpenAI, the maker of ChatGPT, said Australian labour productivity was now 18 per cent behind the US, up from 6 per cent a decade ago, and presented “targeted AI investment and broad diffusion across all sectors of the economy” as a blueprint for productivity growth ahead of the government’s economic reform roundtable.

“In reality, the economic winners of the AI era will be those who make deliberate choices today,” the company said in a paper.

“While Australian consumers have been quick adopters of AI technology, our policy settings have tended toward a cautious ‘wait and see’ approach to AI. With other countries moving decisively, Australia must now shift gears – from watching, to shaping – or risk falling behind in competitiveness, innovation and quality of life.”

OpenAI’s global chief economist, Aaron Chatterji, said countries should think about AI policy from an “economy, national security, and impact on society” lens.

Dr Chatterji also served as the White House co-ordinator for the CHIPS Act – which aimed to onshore computer chip production to the US and choke China’s access to high-quality chips – under the Biden administration.

“I do believe compute (computing capacity) is going to be a really important part of national competitiveness and geopolitics,” he told The Australian on a visit to Canberra, where he was meeting with ministers and officials.

He was asked whether this new lens meant data centres – and the computing capacity they deliver – would rank among key strategic resources such as oil and munitions production in the future.

“I think AI is going to be like a first-order issue in economic competitiveness and geopolitics,” he said. “There’s much more discussion about AI and national security now than … at the beginning.

“AI is a key part of national security as well because it’s going to be a key part of the capabilities that any country has to protect itself. So you are seeing a lot of investments in AI across the world as well.”

The Trump administration is increasingly looking to play an active role in data centre production, with OpenAI chief executive Sam Altman even travelling with President Donald Trump to the Middle East where he announced plans to build a huge data centre complex in the United Arab Emirates.

The OpenAI paper, noting sluggish Australian productivity and Anthony Albanese’s stated intention to build a “more dynamic, more productive, and more resilient” economy, said AI offered a “way to lift productivity not just by improving efficiency, but by rethinking how work happens”.

“As other nations move quickly to harness these benefits, Australia must keep pace,” it said.

“Strategic adoption of AI can help modernise industries, lower costs for small businesses, and position the economy as high-value and innovation-led – key ingredients for sustaining wages, lifting national competitiveness and attracting long-term investment.”

The OpenAI report identified “insufficient growth in digital infrastructure and AI-ready data centres” as a challenge Australia faced, urged a “single, streamline approval process for AI infrastructure projects”, to “harmonise standards”, and also identified “energy supply challenges” in the country.

Tom Porcelli, chief US economist at PGIM Fixed Income, a division of the $US1.4 trillion ($2.14 trillion) asset manager PGIM, said restrictions to the growth of AI, such as those emerging in parts of Europe, risk limiting the productivity gains that many economies are hoping to realise.

“In the United States right now, there are really no roadblocks to AI,” he said. “It’s just, invest and get it out to market. There are already roadblocks … being put up in Europe, which you’re not seeing in the United States, and I think Europe, which is more advanced in its ageing population challenge than the United States, should be just rapidly engaged in that kind of technology.

“I think if you do a corporate tax cut, whether it’s in the United States or any other country, that probably incentivises them a little bit more to really sort of go out and make a bigger push.”

Businesses and unions are battling over the role of government in AI, with businesses calling for light-touch regulation and accelerated data centre investment, and unions calling for a stand-alone AI Act to protect worker replacement.

This article first appeared in The Australian as AI ‘vital national security asset’, says OpenAI