Compute in Australia: Announcing my new podcast series

I've been ruminating on this for a while now.

Early last year, I started thinking about the economic opportunity, whether or not compute could become our next great export industry, and asking a bunch of economist friends what the answer to that question might be.

But this year I started thinking a lot more about the strategic leverage compute could afford us.

That new thinking was primarily motivated by my growing anxiety about our access to frontier AI.

If the connection here isn't immediately obvious, let me explain.

Pretty soon, AI will be so deeply woven into the substrate of society that it becomes a utility like water or the internet.

It's hard to picture this possibility today, especially if you view AI as nothing more than frivolous chatbots.

But imagine a not-too-distant future where almost all economic and social activity, from how businesses negotiate and transact to how you access hospitals and government services, is in some way mediated through AI agents.

At that point, uninterrupted access to the AI substrate becomes critical.

To take the internet as an analogy, Australia, more precisely the University of Melbourne, first gained access to the global internet in 1989.

If you'd switched off our access in the early 90s, you would have pissed off some university researchers and early adopters, but you wouldn't have triggered societal upheaval.

If you switched it off today, the story would be quite different.

Of course, today's internet can't actually be switched off like that because it's decentralized.

And this is where the AI slash internet analogy stops.

Assuming frontier models continue to meaningfully outperform open source alternatives, access to the frontier remains crucial.

But control over this access may be concentrated in the small number of companies building frontier AI and in the country or countries in which those companies are based.

At least in the near term, Australia is unlikely to build its own frontier AI.

We don't have the density of talent or the colossal amounts of capital that appear to be necessary.

Only two countries are running that race, the United States and China.

Australia will generally choose American models, but American AI companies exist under American law.

They can be controlled and coerced by American governments.

We caught a glimpse of this in March, when the Pentagon declared Anthropic a supply chain risk.

And again in April, when Anthropic gave early access to a model with unprecedented cyber capabilities, Claude Mythos preview, to selected organisations, all of whom were US domiciled or headquartered.

No Australian business or government agency was on the initial list.

And we saw yet another glimpse in June when the US government imposed export controls that denied foreign users access to Fable 5 and Mythos 5, though in practice this forced Anthropic to suspend access for all users.