Australia will introduce legislation to govern artificial intelligence and impose binding energy and water standards on large data centres, Prime Minister Anthony Albanese announced in a speech at the University of Sydney on Wednesday. The centre-left government will create an Office of AI within the Department of the Prime Minister and Cabinet, ending what Albanese described as an “issue-by-issue, sector by sector” approach. A bill is expected to be introduced in parliament early next year.

The proposed standards would require large data centres to be net producers of energy—putting more power into the grid than they consume—and to underwrite their own connection costs so that households and businesses are not burdened. Operators would also be obliged to minimise water usage, maximise energy efficiency, and avoid competing with residential land. The framework marks a departure from Australia’s current reliance on privacy and consumer laws and a voluntary AI ethics code.

Albanese framed the intervention as a defence of national interest and creative industries. He said Australian content was not “up for grabs” and that using local books, music, art or news to train AI without the artist’s control amounted to “theft.” The remarks followed disclosure that US startup Anthropic had lobbied Australian officials to amend copyright laws to facilitate AI model training. The Climate Council, a think tank, warned that unchecked data-centre growth could drive up energy prices and emissions. Opposition Leader Angus Taylor criticised the new office as an expansion of bureaucracy rather than a boost to private-sector innovation.

Investment in data centres was the largest contributor to Australia’s economic growth in the March quarter, according to government figures. Albanese said the government had not yet observed an impact on the jobs market and argued AI should be used as “an instrument to create” good jobs. The government will discuss the proposed standards with state and territory leaders at a National Cabinet meeting next month, ahead of the legislative push.