Australia faces a critical choice in artificial intelligence: invest heavily now to become a global AI power, or accept a subordinate role where other nations dictate the terms of technological progress. According to Andrew Hastie, a senior Australian policymaker, the country is at a pivotal moment similar to when it missed the opportunity to develop nuclear weapons in the last century. Without decisive action, Australia risks becoming what he calls a "price taker" rather than a "price maker" in the AI age.

What's Driving the Urgency Around AI Sovereignty?

The global AI competition has reached what historians describe as a peak moment of danger. Two distinct races are unfolding simultaneously. The first is happening within the United States between five major American companies: Anthropic, Google, Meta, OpenAI, and xAI. These firms are investing at a scale that dwarfs government spending. In 2024, the private sector invested more than $109 billion in AI research and development, compared to roughly $3.3 billion from the U.S. government in 2025, meaning the private sector invested approximately 33 times more than the government.

The second race is far more consequential for global geopolitics: the competition between the United States and China for AI dominance. This rivalry centers on Taiwan, which produces roughly 90 percent of the world's advanced semiconductor chips. Control over Taiwan means control over the vital infrastructure that both superpowers need to achieve their AI ambitions.

Why Should Australia Care About This Competition?

For mid-sized nations like Australia, the stakes are existential. If the country fails to develop meaningful AI capabilities, it will become dependent on the AI superpowers for critical technology and strategic decision-making. This mirrors Australia's nuclear situation: because the nation never developed nuclear weapons, it now operates under the nuclear umbrella of the United States, which constrains its sovereignty and strategic independence. The same dynamic could play out with AI, leaving Australia with less agency over its own future.

The concern extends beyond geopolitics to domestic competitiveness. Australia's education system is already struggling, with numeracy and literacy levels declining over the past 25 years. If AI adoption accelerates without proper preparation, the technology could entrench economic and social disadvantage, particularly for disadvantaged children who already fall behind their peers.

How Can Nations Build AI Independence?

• Strategic Investment: Nations must invest deeply in AI research and development infrastructure to compete with private sector spending and avoid technological dependence on foreign powers.
• Education Reform: Preparing young people for an AI-driven economy requires urgent improvements in numeracy, literacy, and technical skills, especially for disadvantaged populations.
• Semiconductor Security: Securing access to advanced chip manufacturing or developing domestic alternatives is critical, given that Taiwan controls 90 percent of advanced semiconductor production.
• Regulatory Framework: Developing clear policy frameworks that encourage innovation while protecting national interests, rather than leaving AI development entirely to private companies.

The Trump White House's National AI Legislative Framework, released in March 2026, signals how the U.S. is approaching this challenge. The four-page document contains two notable points: first, it delegates AI policy responsibility to Congress but explicitly states that Congress "should not create any new federal rulemaking body to regulate AI." Second, it declares that the United States' national strategy is to achieve global AI dominance.

"In the age of AI, will Australia be a price taker, or a price maker?" stated Andrew Hastie, speaking at the 2026 Tom Hughes KC Oration in Sydney.

Andrew Hastie, Member of Parliament, Australia

This question encapsulates the central challenge facing Australia and other nations outside the U.S.-China competition. The window for action is narrowing. As Hastie emphasized, "We are running out of time." The private sector's dominance in AI investment, combined with the geopolitical stakes around Taiwan and semiconductor control, means that nations must act decisively now or risk permanent technological subordination.

As Hastie

For Australia specifically, the path forward requires treating AI sovereignty with the same strategic importance as nuclear deterrence, education reform, and semiconductor security. Without such commitment, the nation will find itself in a position of weakness, dependent on decisions made by AI superpowers in Washington and Beijing, with limited ability to shape its own technological and economic future.