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Defence Minister Richard Marles says Australia’s place in the AI race is the most critical moment for national self-reliance since World War II, as he heads to San Francisco to advance a $21 billion deal that would boost Australia’s stake in the technology’s development.
The deputy prime minister told this masthead the timeframe for locking in an agreement to make Australia a second home for Anthropic was measured in months not years “because the technology is moving so fast”, adding urgency to his trip.
He will fly to the United States on Monday to meet with executives at the top AI firms, accompanied by Labor’s AI pathfinder, assistant minister Andrew Charlton. Marles will then meet US Defence Secretary Pete Hegseth in Washington and new UK Defence Secretary Wes Streeting in London to talk AUKUS.
In his most expansive remarks on how AI would influence security, Marles said the tech would one day operate submarines and F-35 aircraft, and provide battlefield data to soldiers being targeted by AI-operated drones.
To give Australia influence over and access to these models, and to avoid being a passive “taker” as the US and China battle for tech supremacy, Marles declared: “We’re with the United States – there’s no question there.”
Marles admitted there were unanswered questions about what types of capabilities Australia could develop if it turned into a relatively important player in the US tech buildout, which some have compared to the nuclear arms race.
“What I know is the opportunity to create that agency lies in this collaboration,” he said. “The question is what agency do we have over that AI technology?
“This is as big a sovereignty inflection point as we’ve seen since the Second World War … We need to be working with America to advance our national interests and develop more Australian capability.”
The emerging technology has turned into a core part of Labor’s agenda. Prime Minister Anthony Albanese told this newspaper last week that his government would expand its AI focus next year when it hopes to pass laws on how data centres, which power AI, should use water and energy.
Political and voter backlash has imperilled data centre construction in the US. Albanese delivered a speech last month to offset a similar backlash in Australia where the Coalition has offered bipartisan support to maintain social licence for the technology that could bolster national security and productivity. The Greens have called for a moratorium on building data centres. Social media firm X said last week that about 200 accounts from a suspected Chinese bot farm had been trying to turn US voters against data centres.
Australia has been in talks with the White House for months to secure first access to the top US frontier models. Signing deals with Anthropic and others such as Google and Amazon could give Australia leverage with the US and its tech sector. Charlton has argued that Australia should not just be a home to data centres, investment in which is rivalling the mining boom, but should aim to develop AI expertise and its own models – a prospect downplayed by sceptics.
The sticking point in Australia’s negotiations with Anthropic has been finding a way to give AI firms access to Australian news and musical content to train their models. Media firms and creatives have demanded Australia create rules to compensate. Albanese told this masthead last week that the government was close to a copyright solution.
Marles said Labor would not sell out creatives as AI firms looked to Australia to create an “alternative node to the US”.
“Our remoteness is our friend, our geography is so good. We are a stable, democratic country, rule of law [with] predictable governance,” he said, as data centre investment in the Middle East becomes riskier due to war.
“This [trip] is about saying we’re serious. We definitely want you to come. It needs to be on the right terms and we’re working that through. We are utterly focused on dedicating resources at the highest levels to solve this policy issue because we see this as a huge moment for the country.”
Coalition defence spokesman James Paterson said AI had profound strategic implications but “right now our public policy settings mean we risk missing the key windows for investment”.
“They won’t remain open forever. That’s not just a missed economic opportunity but would leave Australia weaker in a dangerous world,” he said.
Marles will aim to advance negotiations with Anthropic that Albanese hopes to ultimately sew up in coming months.
The deputy prime minister also launched a defence of the AUKUS pact ahead of his trip.
The stationing of nuclear subs near Perth has been the subject of a row when Australian officials were forced to correct a suggestion that the US submarines would be there for only five years.
AUKUS opponents including Peter Garrett and Malcolm Turnbull have been involved in an unofficial citizens’ inquiry into AUKUS to add momentum to the case against nuclear-powered subs. America’s ability to produce enough Virginia-class subs has also cast doubt over the deal.
Marles said that spending on AUKUS would make up less than 10 per cent of the defence budget over time, pushing back on critics who cite larger figures. The Coalition and other experts have said AUKUS is eating into other parts of the defence budget.
But the defence minister said submarines were “easily the most important capability” because they were “fundamentally asymmetric” in that their hidden presence allowed a smaller force such as Australia to destabilise a larger naval force in a way that it could not do through infantry.
“We describe our most consequential strategic risk as being an adversary that would seek to coerce us,” he said.
“It’s actually a perfect thing for us to be spending money on … If we didn’t operate submarines, we would have much less capability and then we would be much less sovereign.”
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Paul Sakkal is Chief Political Correspondent. He previously covered Victorian politics and won a Walkley award and the 2025 Press Gallery Journalist of the Year. Contact him securely on Signal @paulsakkal.14.Connect via X or email.From our partners
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