While the EU is driving ahead towards comprehensive, rules-based regulation of artificial intelligence (AI), other jurisdictions like the UK have been holding back, adopting a sector-specific principles-based approach to governing AI. Recent announcements by the Australian Government suggest that the antipodean jurisdiction will take a middle road, with the government acknowledging that additional mandatory safeguards are required for “high-risk” AI applications but contemplating more flexibility in lower-risk contexts.

In 2023, the Australian Government conducted a consultation on Safe and Responsible AI in Australia, seeking views on whether Australia has the right regulatory and governance arrangements in place to support the safe and responsible use and development of AI technologies. Over 500 submissions were made and considered before the government issued its interim response on 17 January 2024.

The interim response includes a commitment to consult on additional regulatory safeguards to address potential harms associated with high-risk AI applications, with a focus on testing, transparency and accountability. In the immediate term, the Australian Government expects to work with industry to develop a voluntary risk-based AI safety standard as well as voluntary watermarking or similar labelling schemes to improve transparency around AI-generated content.

Significantly, the response notes that mandatory guardrails will be aimed at AI systems in high-risk settings; lower-risk AI use cases are more likely to be subject to voluntary measures. The response also acknowledges that further work is needed to appropriately define “high-risk” AI in the Australian context.

While questions remain about how the government’s proposals will play out in practice, it is clear from the interim response that the government’s aim is a collaboration with industry and that measures taken will likely be reflective of the risks posed by AI use, rather than a top-down imposition of mandatory rules for AI generally. In this way, Australia can be seen as forging a course between the highly prescriptive and centralised regulatory approach of the EU and the more relaxed, sectoral approach of the UK.

Read Baker McKenzie’s client alert on the Australian Government’s interim response for a closer look at what’s proposed…