Following OpenAI agent’s breach of the Australian Medicare website and Prime Minister Anthony Albanese's call for nations to work together to shape AI developments, a new report from the United States Studies Centre (USSC) at the University of Sydney underscores the positive role Australia can play in regional AI diplomacy and standard-setting.
Partnering with the Australian Department of Foreign Affairs and Trade and the Australian Department of Industry, Science and Resources, the USSC convened a Track 1.5 Dialogue in 2026 and tested and workshopped ideas with AI experts in government, industry and academia to consider Australia’s domestic and regional role in shaping the future of AI.
"The Medicare breach is the canary in the coal mine for AI standards and governance," USSC Director of Strategic Technologies Olivia Shen said. "The fact that Australia was the location of the first known breach of a government website shows that all countries are impacted by AI decisions and must be proactive to maintain their agency."
In Shaping the future of AI: What is Australia’s role and regional influence, Ms Shen and co-author USSC Research Associate Johanna Lim summarised emerging themes and key findings from the AI Dialogue discussions. The report identifies key strengths Australia brings that it could use to secure its place on a global stage with AI but emphasises that this window is closing.
"Australia should pursue AI agency as a top priority and can play a meaningful regional leadership role too,” Ms Shen concluded. "However, without sufficient compute or proactive strategies and regulatory frameworks, Australia and other countries in the Indo-Pacific risk being left behind."
- Shaping the future of AI: What is Australia’s role and regional influence is now available to view or download.