New research reveals for the first time where Australia could lead the world in capitalising on the AI opportunity. The report released by the Tech Policy Design Institute (TPDi) titled, Expanding AI Sovereignty to AI Agency,delivers Australia’s 2025 AI Assessment – the first comprehensive, independent, evidence-based assessment of Australia’s AI capabilities at the national level. The report broadens the conversation from AI Sovereignty to AI Agency, which is the power of a country to shape its AI future. Developed in consultation with more than 250 experts, the Assessment measures Australia’s agency across 103 distinct AI capabilities, then maps the findings against the Australian Government’s 2025 National AI Plan.
“The debate about AI sovereignty has become trapped in a choice between complete self-sufficiency and complete dependence. This is a false binary. The reality is that the AI supply chain is a complex global web, every country relies on others,” said Johanna Weaver, TPDi Co-Founder and Executive Director.
The research finds that while Australia has predominantly emerging maturity in AI capabilities, the national picture is far stronger than the prevailing narrative suggests. Australia holds very high agency in eight capabilities, high agency in another 58, and low agency in only two.
“The data shows Australia is in a stronger position than we give ourselves credit for, we have firm foundations and significant potential to harness,” said Zoe Jay Hawkins, TPDi Co-Founder and lead author.
The report argues that no country can or should try to excel in all 103 AI capabilities. “The assessment allows us to understand our strengths and more deliberately leverage them to fill our weaknesses. Australia has valuable cards in its hand. The opportunity now is to play them strategically – just like the Prime Minister has leveraged Australia’s gas reserves to secure diesel supply,” Hawkins said.
Critically, the areas already prioritised in the Government’s National AI Plan are evidence-based, but there is still work to do. Every significant commitment in the National AI Plan aligns with the evidence on where Australia should build, leverage, or maintain its competitive advantage. The plan leans into genuine strengths – data centres and enabling infrastructure, public cloud, general AI applications, government and small-business adoption, and international engagement – harnessing existing capabilities and delivering benefits that ripple across the whole of society.
The same evidence base reveals where Australia should double down to better leverage other areas where it leads. “For example, leveraging our potential as a regional data centre hub to help fund Australia’s clean-energy transition. Or using Australia’s unique wealth of critical minerals to secure our supply of the advanced AI chips required to power our future economy. Or by leveraging Australia’s data assets, some of the richest in the world, to deliver better emergency management and health outcomes for all Australians,” said Hawkins.
Of the eight capabilities in which Australia holds very high agency, two are backed by significant commitments in the Government’s Plan – geospatial data and international influence. The Assessment flags the remaining six as areas for the Government to prioritise next, either through more investment or greater coordination.
Investment in public sector and public interest compute; inclusive and discerning AI adoption; culturally and nationally inclusive models; and regulatory oversight were among the critical gaps the Assessment identifies for prioritisation.
The report stresses that not every gap is a failing: many capabilities the Plan stays quiet on, such as manufacturing AI chips or building frontier models, are areas where the Assessment finds Australia has a low competitive advantage. “This research allows decision-makers to understand the full chessboard of AI capabilities and make decisions about which to prioritise in the national interest, based on evidence rather than spin,” said Hawkins.
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