Australia has been cautioned to establish regulations for artificial intelligence (AI) to prevent its abuse by foreign powers, which could pose a significant national Security threat. The Australian Strategic Policy Institute has raised concerns that AI products developed or utilized by Chinese companies may compromise security and expose Australians to spyware and hacking. The focus of worry is not China’s AI capabilities themselves, but rather the compliance of Chinese companies with the country’s extensive security laws, which are subject to direction from government security and intelligence agencies.

The risks associated with this situation include potential espionage through surveillance and data theft, as well as the potential sabotage of systems and services. Furthermore, the use of AI to conduct foreign interference, such as the widespread dissemination of misinformation and disinformation, also presents a significant threat. The report highlights the need for democracies to assess the level of risk they are willing to endure in the face of escalating strategic competition with China.

The report suggests three possible solutions to mitigate the risks associated with AI: auditing current systems, engaging experts to identify security vulnerabilities through a “thief-to-catch-a-thief” approach, and implementing regulations for this emerging technology. Regulatory measures could include restrictions on the use of Chinese AI technology in specific systems, such as National Security networks or government devices, or even a complete ban. However, the report acknowledges that a blanket ban would be disruptive and costly.

While many businesses and researchers in democracies may wish to maintain collaborations involving Chinese AI-enabled products for the benefits of innovation, improved products, cost-effective services, and scientific advancements, Mr. Gilding argues that regulation is necessary to counter the growing security threats. As he states, “It is a balanced measure in a world in which China is neither at peace nor at war with us. We should be vigilant about the balloons in the sky, but we should think harder about the ghosts in the machine.”

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