Why Australia simply cannot afford to miss this AI wave

September 26, 2026 — 5:00am

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Artificial intelligence is shaping as a historic wave of global transformation analogous to the fast-fading era of globalisation. It’s full of potential and pregnant with problems.

The Hawke-Keating government saw globalisation unfolding in the 1980s and made the fateful choice. Australia could continue hiding behind its tariff wall or enter the competitive world marketplace.

They made the bold choice. The costs of adjustment were enormous. But Australia’s competitive strengths were greater. Australia prospered for 30 years.

Now, globalisation is reversing. The nation that led the modern era of globalisation was the US. Today it’s the leading wrecker, courtesy of Donald Trump’s tariffs.

What’s the next great global opportunity for Australia?

The energy transition presents a big investment wave. Worldwide investment in renewables last year was $US2.3 trillion ($3.27 trillion) and rising, overtaking carbon-based fuel investment for the second consecutive year, according to Bloomberg New Energy Finance.

Australia has been getting a share, but a flagging share, and now it’s struck real trouble. Total renewables investment last year was $9.2 billion. After subtracting booming home battery spending, the investment in large-scale solar and wind projects was only $4.4 billion – half the total for 2024.

This is a trivial share of the world total. Progress has been real, with renewables now supplying around half the Australian grid’s needs. But the stalling of new spending on utility-scale projects is an embarrassing policy failure for a country that calls itself a “renewable energy superpower”.

The big new wave is AI. In the past three years, just four of the big tech firms – Google, Amazon, Microsoft and Meta – have invested a combined $US1.1 trillion. They plan to spend another $US745 billion this financial year.

The Wall Street Journal this week compared projected AI investment with the earlier great infrastructure booms over two centuries of American experience and reported: “The AI build-out is on track to become the biggest economic bet in US history, dwarfing the investments made to fund other huge US infrastructure projects such as the railroads, the highway system and the plumbing for the internet.”

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Peter HartcherPolitical and international editor

Political and international editor

And it measures this as a proportion of the........

© The Age