OpenAI just told Australia it won't build here unless copyright law gets looser

OpenAI has told the federal government it will not build an AI training data centre in Australia unless the country's copyright law gets significantly looser, and the timing could not be more awkward for Canberra.

Ann O'Leary, OpenAI's chief legal officer, told The Australian the company simply cannot proceed under the current framework. "We will not be able to build a training centre here if the copyright law is as it exists," she said. Australia's cheap renewable energy makes it an attractive base for the kind of data centre that trains frontier AI models, but OpenAI wants clear legal room to train on local creative work without individually licensing it first.

That demand landed days after leaked government documents revealed the attorney-general's department has been quietly workshopping an opt-out system with rights holder groups. Under one option, AI companies could train on content by default unless the creator specifically opted out, provided the company had struck licensing deals with enough other rights holders. Critics have pointed out this looks a lot like the text and data mining exception the government previously ruled out.

Shadow attorney-general Michaelia Cash was blunt about the contradiction, calling it "an opt-out bolted on" to the exact policy Labor had already rejected. It also sits awkwardly against Anthony Albanese's own words from a July speech at Sydney University, where he said handing Australian content to US firms to train their models "would amount to theft."

So the government is stuck between two constituencies who both feel betrayed. Writers, artists and journalists want their work protected and paid for. Big AI labs want frictionless access or they take their billions in data centre investment elsewhere.

Nobody wins this one cleanly, and the government now has to decide which side it is more afraid of disappointing. Worth watching closely over the next few weeks, because whichever way this goes will set the template for every AI company negotiating with Canberra after OpenAI.