Australia has high AI agency in eight capabilities

Tech Policy Design Institute has published an assessment of Australia's AI strengths and gaps, finding the country has very high agency in eight of 103 measured AI capabilities.

The assessment, Expanding AI Sovereignty to AI Agency, examines national AI maturity across six layers of the AI ecosystem. Developed with input from more than 250 experts from government, industry, research and civil society, it maps its findings against the Australian Government's National AI Plan.

Australia's overall AI maturity remains at an emerging stage, the report says, but it argues the national position is stronger than commonly assumed. It identifies very high agency in strategic and critical minerals, medical data, geospatial data, environment and resources data, demographic data, infrastructure data, computer vision model development, and international influence and norm-shaping.

More broadly, Australia was rated as having high agency in another 58 capabilities and low agency in only two. The study defines AI agency as a country's ability to shape its own AI future, rather than achieve complete self-sufficiency.

Beyond sovereignty

The think tank argues that policy debate has often framed AI sovereignty as a binary choice between domestic control and foreign dependence. Its assessment instead describes the AI supply chain as globally interconnected, with countries relying on one another across hardware, data, infrastructure, talent and models.

"The debate about AI sovereignty has become trapped in a choice between complete self-sufficiency and complete dependence. This is a false binary. The reality is that the AI supply chain is a complex global web, every country relies on others," said Johanna Weaver, TPDi Co-Founder and Executive Director.

The findings come amid concern in Australia about dependence on foreign providers of advanced AI systems and infrastructure. The report argues policy should focus less on trying to lead in every field and more on building around areas where the country already has leverage.

That approach is reflected in the report's central claim that no country can or should aim to dominate all 103 AI capabilities measured in the assessment. Instead, governments should decide where to build, where to maintain, and where to rely on partners.

"The data shows Australia is in a stronger position than we give ourselves credit for, we have firm foundations and significant potential to harness," said Zoe Jay Hawkins, TPDi Co-Founder and Lead Author.

"The assessment allows us to understand our strengths and more deliberately leverage them to fill our weaknesses. Australia has valuable cards in its hand. The opportunity now is to play them strategically - just like the Prime Minister has leveraged Australia's gas reserves to secure diesel supply."

Policy alignment

The study says the Government's National AI Plan broadly aligns with the evidence in several areas already singled out for support. These include data centres and enabling infrastructure, public cloud, general AI applications, adoption by government and small business, and international engagement.

At the same time, some areas where Australia has very high agency are not backed by the same level of policy focus. Of the eight strongest capabilities identified, only geospatial data and international influence are supported by significant commitments in the current plan, according to the report.

In the institute's view, that leaves six areas that warrant greater attention through new investment or stronger coordination: strategic and critical minerals, medical data, environment and resources data, demographic data, infrastructure data, and computer vision model development.

The report also identifies broader gaps it says should be prioritised, including public sector and public interest compute, more inclusive and discerning AI adoption, culturally and nationally inclusive models, and regulatory oversight.

Where to focus

Hawkins points to several examples of how existing strengths could be turned into policy advantages. The report argues Australia's position in critical minerals could help secure access to advanced chips, while its data assets could support stronger public services and emergency responses.

"For example, leveraging our potential as a regional data centre hub to help fund Australia's clean-energy transition."

"Or using Australia's unique wealth of critical minerals to secure our supply of the advanced AI chips required to power our future economy."

"Or by leveraging Australia's data assets, some of the richest in the world, to deliver better emergency management and health outcomes for all Australians," said Hawkins.

The report also makes clear that not every weak point should become a national priority. In some fields, such as manufacturing AI chips or building frontier models, it finds Australia has low competitive advantage, suggesting policymakers may be better served by directing effort elsewhere.

That distinction is central to the assessment's broader argument. Rather than treating every gap as a failure, the study calls for more selective decision-making about where Australia should invest, where it should partner internationally, and where it should accept dependence as part of a global AI market.

"This research allows decision-makers to understand the full chessboard of AI capabilities and make decisions about which to prioritise in the national interest, based on evidence rather than spin," said Hawkins.