Australia's 'missing middle' AI capabilities

Australia is in the midst of a generational transformation as it harnesses the potential of AI and plays host to global multinationals that are investing significantly in infrastructure. In the last month alone, US-based AI firm, Anthropic, has launched into Australia and Microsoft has announced a $25bn investment into its Australian business.

Australian governments, at both state and federal levels, have been ambitious in positioning Australia as a top destination for AI compute capacity and are reaping the rewards, providing a strong foundation and fertile space for business to build a robust and world leading industry. As this momentum accelerates however, the most important question is not about scale or capability, but about purpose: who is this emerging AI industry ultimately being built to serve?

What all Australians want to see is an industry that brings opportunity and innovation to its businesses. We want to see an industry that puts Australian companies on the world stage, enticing investment into homegrown businesses and setting Aussies up for success. AI outputs are inherently mobile: what is processed in one country can be commercialised in another. Without the right policy settings, Australia risks developing AI capacity that benefits other economies more than its own — becoming a ‘token commodity’ exporter while bearing the substantial costs of land, water and energy needed to operate data centres.

The issue is not around datacentre investment; recent headlines demonstrate substantial capital commitments. The challenge is the timescales of these projects, which typically take decades to reach full operational status. This creates a lag across the industry: headline-level AI investment continues to grow, but businesses lack the near-term access to infrastructure needed to meaningfully participate, experiment and innovate.

Australian businesses need AI capabilities soon if they are to compete on the world stage. That is why we are working closely with Australian businesses, organisations and start-ups to deliver outcomes that they require today to become Australian powerhouses of the future in line with the government’s vision of transforming Australia into an AI technology centre.

There is a widening ‘missing middle’ in the Australian technology landscape, of Australian-centric, sovereign and purpose-built AI solutions that would empower businesses in the short term, develop strategic capabilities that are uniquely Australian and cement Australia’s future as a leader in AI innovation. Australian governments at all levels have a vital role to play in ensuring solutions meet the needs of Australian businesses today and to nurture a skilled, resilient and sovereign industry that can reap the rewards of the AI revolution.

The team and I at ResetData have been leading the charge in developing Australia’s ‘missing middle’, empowering local businesses across the country with the AI compute capacity to further Australia’s national interests.

In the academic sector, ResetData has already made AI processing capacity available to researchers in the University of NSW and University of Adelaide via the AIF1 factory, accelerating research outcomes and putting Australia on the map as a leading institution in AI development.

We have the building blocks to be a global leader in the AI race and put Australian companies and organisations on the map for decades to come, but time is running out. Australia must strike a balance between the needs of the local sector with the wants of the global market if we are to ensure that Australia takes full advantage of this once-in-a-lifetime revolution.

Image credit: iStock.com/Andrey Suslov