AI companies want to water down Australia’s copyright laws. Artists are outraged, Labor is split

When Anna Funder stood before a pack of journalists at Parliament House earlier this month, she presented herself not just as a writer but also a “victim of crime”.

The Stasiland author was using the analogy to illustrate how technology companies have flagrantly “hoovered up” her literary works for their own profit.

Funder was also highlighting the importance of copyright laws in providing at least some layer of protection to Australians whose livelihoods depend on the original content they produce.

Authors, artists, musicians and media organisations were last year assured those laws wouldn’t be watered down when the federal government ruled out granting a legal exemption for artificial intelligence companies to mine content to train their large language models (LLMs), such as ChatGPT, Gemini and Claude.

But continual lobbying from tech giants and a whistleblower’s tip-off to the independent senator David Pocock have ignited fears that the Albanese government might go back on its word – even as it continues to insist that it won’t.

The stoush has exposed splits within Labor about how to respond to AI and raised questions about how far the government should bend – if at all – to big tech to capture the supposed riches of the datacentre boom.

The prime minister, Anthony Albanese, is expected to deliver a major speech on Wednesday about the government’s plans for regulating and capitalising on the nascent technology.

After abandoning former industry minister Ed Husic’s vision for a dedicated AI act in favour of a hands-off approach to regulation, the government is reportedly set to pivot back to a more interventionist strategy.

A concrete announcement on changes to copyright laws is not anticipated as part of Albanese’s address, which Guardian Australia has been told will be more vision statement than detailed policy announcement.

Senior Labor sources say ministers have been split on the path forward for copyright reform, delaying a resolution.

The industry minister, Tim Ayres, and the assistant minister for the digital economy, Andrew Charlton, are the most enthusiastic about attracting AI investment, while the attorney general, Michelle Rowland, who is responsible for copyright laws, and the arts minister, Tony Burke, are determined to protect the rights of creatives.

The prime minister sought to reassure creatives when asked last week if the copyright safeguards were at risk, pointing to the news bargaining incentive as evidence of Labor’s “strong track record” in protecting local content producers.

“These are complex issues, we’re working it through with the sector. But my government, I think, has a strong record of supporting people; one, having control over things that they have created, and secondly, if things are being used, being paid for it, being properly compensated for it,” the prime minister said.

The government has insisted it has no plans to grant a “text and data mining” exemption that would allow AI companies to scrape content to train their models in Australia without infringing on copyright laws.

The Tech Council of Australia chair and Atlassian co-founder, Scott Farquhar, directly appealed for the carveout last July, claiming that “fixing this one thing could unlock billions of dollars in foreign investment”.

The Productivity Commission floated the idea of an exemption in a report a few weeks later, provoking a furious backlash from the creative sector that eventually led Rowland to kill off the proposal in October.

The attorney general immediately started fresh consultation with creatives, media and tech companies on other options to modernise copyright laws, including a paid licensing model for AI.

The government’s publicly stated preference is for tech firms to negotiate agreements with creatives to pay to use their content.

But the timeframe for a resolution remains unclear, leaving the tech industry and creatives in the dark.

The creative sector, Pocock and the Greens have in recent weeks grown fearful the “text and data mining” option could be resurrected as the Albanese government eyes more investment in datacentres.

In late June, Pocock’s office was tipped off about an industry push for a copyright carveout in exchange for at least $50bn in datacentre investment and contributions to a fund for creatives, supposedly worth $350m per year.

The independent senator for the ACT described the proposal presented to ministers as the “ultimate dirty deal” and demanded Labor immediately rule it out.

“To sell out Australian creatives would be a reckless act. To sell out Australian creatives for a couple of hundred billion dollars in datacentres, a bump to GDP, would be reckless,” Pocock told the Senate on 1 July.

The federal government flatly rejected Pocock’s claims as inaccurate while repeating it had no plans to weaken copyright laws.

On Tuesday, the Australian Financial Review reported Anthropic was pushing for a deal in line with what Pocock was alleging as part of a plan to make Australia its second home outside the US.

Anthropic, whose chief executive, Dario Amodei, signed a memorandum of understanding with the federal government after meeting Albanese in April, was contacted for comment.

Industry and government sources, speaking to Guardian Australian on the condition on anonymity, poured cold water on such a deal with Anthropic or other companies.

However, Guardian Australia understands the government has been told frontier AI companies view copyright laws as a “main barrier” to investment in training their models.

‘We have negotiating leverage here’

Australia is viewed as an ideal host for datacentres as a safe, politically stable nation with access to land and renewable power.

But multinational tech giants are prepared to invest elsewhere in what has become a global arms race.

Husic, who now sits on the backbench, says the Australian government had the leverage and should not bow to their demands.

“Keeping with the best traditions of late night TV infomercials, we’re being pressured by US tech that if we don’t sign up to these datacentre deals now, we’ll miss out on a huge opportunity,” Husic says.

“Impulse purchases are often regretted and our government should take a moment to remember we have negotiating leverage here and the ability to set the terms.”

The federal government has set “expectations” for datacentre developers, which include securing additional green energy and covering their share of transmission and distribution costs.

Husic wants further restrictions, including banning new centres on land set aside for housing.

The Labor MP has previously suggested a moratorium might be necessary if the datacentre “frenzy” was making it harder to hit the nation’s housing construction targets.

One Labor MP says opposing datacentres is akin to “nimbyism” and the federal government should establish consistent rules across the country to ensure Australia secures benefits from the global investment race.

The MP argues Australia is not seeing widespread protests against datacentre operation and construction, as has been seen in the US.

Belinda Dennett, the CEO of Data Centres Australia, says the country has “all the attributes” to be an attractive centre for AI but “policy certainty” is critical to securing that investment.

“We support the principles of the government’s datacentre expectations, but we need to understand how they will be implemented and how they will work with state and local government requirements,” she says.

Public polling shows Australians are split on how they view AI.

The Guardian Essential poll in May found 36% of voters think AI carries more risk than opportunity, while 41% see risk and opportunity about the same. Only 22% think AI has more opportunity than risk.

Charlton is spearheading the government’s AI plans, an usually large policy responsibility for a junior minister in just his fourth year in parliament.

The former top economic adviser to Kevin Rudd is considered one of Labor’s rising stars and sharpest and most business-savvy minds, having made a personal fortune after founding and then selling boutique consultancy firm AlphaBeta Advisors.

The Parramatta MP’s close ties to the tech world make him uniquely qualified to understand the risks and opportunities of AI. Some colleagues believe he is too pro-tech, which clouds his perspective and priorities.

Charlton has sought to position himself as a centrist in the datacentre debate, neither a booster nor an alarmist.

In a 10 June speech, he argued that Australia should not “blindly accept or reject” the investment on offer from the tech giants.

“Rather, Australia should actively set the terms on which that investment occurs, consistent with our values and aligned with our long-term interests,” he told the Sydney Institute.

When it comes to setting the terms, creatives have made clear that trading away copyright protections must not be on the table.

“The government has said previously that they would not allow a text and data mining exemption,” says Greens communications spokesperson Sarah Hanson-Young, who is chairing a parliamentary inquiry into datacentres.

“But anything that quacks like that, moves like that, would be a betrayal.”