Open AI breaks ranks with Tech Council of Australia over heated copyright issue

The fault line between innovation and regulation in Australia just widened. At the recent SXSW Sydney conference, Chris Lehane, the Chief Global Affairs Officer at OpenAI, made a clear statement: Australia may not reform its copyright laws in the way some in the tech industry want—but OpenAI will be here anyway. The Guardian+2Digital Watch Observatory+2

This places OpenAI at odds with the Tech Council of Australia (TCA), which has been lobbying for changes to Australian copyright law—specifically a “fair use”-style exemption or text-and-data-mining (TDM) exception—arguing that without such reforms Australia will fall behind in the global AI investment race. channelnews.com.au+2ABC+2

What Exactly Is the Disagreement?

At its heart the conflict involves how copyrighted material should be treated when used to train artificial intelligence models. The key issues:

• The Tech Council of Australia has argued that Australia’s current copyright laws—built around “fair dealing” rather than a broad “fair use” regime—pose a barrier to large-scale AI projects and data centre investment. channelnews.com.au+1

• OpenAI, however, signalled its willingness to engage in Australia regardless of whether such reforms happen, stating: “We are going to be in Australia, one way or the other.” Digital Watch Observatory

• OpenAI also framed two future pathways: one in which copyright law evolves toward a U.S-style fair use approach enabling “frontier” models; and another in which the law remains restrictive, in which case more narrow models would be built. The company says it can operate under either scenario. The Outpost

In other words, while the TCA is pressing for reform in Australian law to enable larger-scale AI investment, OpenAI is signalling a much broader commitment to presence than contingent upon those legal changes.

Why It Matters

This disagreement has broader implications for Australia’s AI ecosystem, regulatory policy, creators’ rights and international competitiveness. Consider the following angles:

• Investment and Global Competition: If major players like OpenAI invest in Australia regardless of legal reform, Australia potentially becomes a better-bet location for AI infrastructure, talent and projects—even with the current copyright regime. For investors looking at risk, this matters.

• Creators’ Rights and Compensation: The arts, publishing and allied sectors have sounded alarm that AI models trained on their content without compensation would erode livelihoods. The Productivity Commission’s interim report recommended a TDM exception; authors and creatives push back that this would amount to “free pass” use of their work. ABC

• Regulatory Strategy & Sovereignty: Australia’s copyright laws were not designed around large language models and massive data-ingestion. The Copyright & AI Reference Group (CAIRG) is already exploring these issues. Attorney-General's Department

• Future of AI Models in Australia: OpenAI’s comments suggest that Australia has the features necessary for “frontier” AI—such as a developer base, good connectivity and renewable energy potential—but also that legal uncertainty will not deter them. Digital Watch Observatory

What Should Australian Stakeholders Do?

Given this divergence and its consequences, several courses of action present themselves for policymakers, creators, investors and industry leaders:

1. Clarify the Legal Framework: Policymakers need to provide clearer guidance on how copyright law applies to AI training in Australia. If the law remains ambiguous, uncertainty will persist.

2. Establish a Dialogue With Creators: It is crucial to ensure that mechanisms exist so creators are not sidelined. Licensing, compensation models, opt-out vs opt-in frameworks—all need serious consideration.

3. Ensure Investment-Friendly Infrastructure: If Australia aims to host large-scale AI projects, investment in data centres, energy, connectivity and regulation must be coordinated. OpenAI’s commentary on country suitability underscores this.

4. Balance Innovation and Rights: A balanced outcome would enable innovation while protecting creative labour. Australia can seek to be a model of how democratic jurisdictions handle these tensions.

5. Monitor Global Trends: As other jurisdictions adopt different approaches (some looser, some stricter), Australia’s relative regulatory stance will affect its attractiveness. OpenAI’s willingness to proceed “under either scenario” signals global norms are shifting.

Key Takeaway

This public divergence between OpenAI and the Tech Council of Australia is more than a squabble over policy. It reflects a crucial moment in Australia’s digital economy — where law, creativity, investment, infrastructure and global competitiveness all converge.

For Australia to secure a meaningful role in the next wave of AI development, the alignment of policy, rights-protection and investment strategy will matter. OpenAI’s message is clear: being in Australia is non-negotiable. The question for the nation is what kind of regime it will be under.

At TMFS we believe that responsible leadership means anticipating not just opportunities but the tensions that come with them. When major global tech players indicate they will “be here anyway,” we must ask: are we ready—legally, ethically, strategically—for the consequences and the promise?

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