Written by: Nick G. on 12 August 2026
(Malin-AUKUS with Vice-Admiral Gaucher (@PMalinauskasMP X account)
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SA Premier Malinauskas has just announced a Royal Commission into artificial Intelligence (AI). The announcement followed his return from a trip to the US where he met with US politicians, Department of War personnel and AI industry leaders.
The visit to the US was as much about the AUKUS arrangements as it was about AI, but there will be no SA Royal Commission into AUKUS, just as there has been no federal parliamentary enquiry.
The Royal Commission will be headed by a three-person panel and report back by July 1, 2027. “It’s all about ensuring South Australians maximise the benefits and minimise the unwanted risks,” said the Premier.
He said a rising backlash against data centres in the US required clear AI policy settings in South Australia. In the US there have been big demonstrations against the 4,000 plus data centres especially in Nashville Tennessee. People are worried about water and electricity prices going through the roof due to amount used by data centres, plus pollution of the air and noise levels.
Malinauskas in the US
The SA Premier met with US Department of War personnel Admiral Bill Houston, Director of the Naval Nuclear Propulsion Program; Vice Admiral Rob Gaucher, the United States’ Director of Submarine Programs, at the Washington Navy Yard; and US Naval Academy, Maryland, Superintendent Lieutenant General Michael Borgschulte. These meetings focussed on what the SA government must do to facilitate the delivery of AUKUS.
He also met AI industry leaders including leaders of STACK Infrastructure, based in Virginia and owner of 7 Australian data centres; Apple CEO Tim Cook; OpenAI Co-Founder and President Greg Brockman, with whom he signed a Memorandum of Understanding on its operations in SA; and Anthropic co-founder Tom Brown.
He met various politicians, including US State Department AUKUS Liaison Adam Korzeniewski; Michael DeSombre, Assistant Secretary in the Bureau of East Asian and Pacific Affairs at the US Department of State; and several Congressional representatives.
Finance capital was also present in a team from private equity and asset management giant Carlyle Group, as well as Chief Executive Zach Shore of the Hermeus Group, contracted by the US Air Force to build an updated version of the Concorde, a hypersonic aircraft capable of flying faster than the speed of sound.
Data Centres in SA
There are already a number of small and medium-sized data centres in SA including one at Woomera Ave, Edinburgh, close to the RAAF Base and its co-located No. 1 Space Surveillance Unit.
The DigiCo Edinburgh data base was bought out by Queensland data centre operator iseek in 2022 to increase “our exposure within the defence and education sectors”. However, iseek itself was bought out by Australian company HM Capital. “Australian” may be a misleading term as nearly every one of the 20 top shareholders in HMC is a bank or finance nominee company, and nominee companies are often holding mainly US and other overseas investors’ capital.
A moratorium on data centres?
A number of people on Malinauskas’s Facebook page have quite rightly asked whether there should be a moratorium on new data centres while the Royal Commission enquires into AI. This will not happen.
One of the most controversial projects already underway was announced by Malinauskas before his US trip. On June 23, plans for multiple AI data centres in regional South Australia were announced. Malinauskas pledged to lead the nation in AI infrastructure and development through a ‘Data Centre Strategy’, and estimated $850 billion would be invested in the sector over the next few years.
The Strategy followed an announcement that IREN Limited, an Australian company headquartered in Sydney, would build an 800MW AI data centre in the state’s Mid North at Bundey, a failed town on Ngadjuri land that could not survive its location on Goyder’s Line which divides SA according to rainfall. The centre would be one of the largest in Australia.
Iren owns data centres in Canada and the US, powered by renewable energy, for both cryptocurrency mining and AI cloud services. Cryptocurrencies are the vortex into which speculative capital is sucked. Iren offers bitcoin customers proof-of-service, deterring manipulation of data by establishing large energy and hardware-control requirements.
Servicing the data requirements of speculative capitalists may be profitable, but it comes at a cost to energy consumption and water needed to cool the facility.
Two other centres are proposed for Stirling North (near Pt Augusta), and Tailem Bend on the Murray River. Both are to be AI factories, a specific type of data centre. The latter are designed for computing tasks, including data storage, web hosting, and enterprise applications, whereas the former are designed specifically for developing models in AI and Machine Learning.
These two AI factories are to be built by Firmus which is already building one AI factory in Tasmania, and has two more planned. The company ran into trouble in July when it inadvertently placed on its website an internal memo stating that it intended to use state-owned agricultural irrigation water for cooling its facility despite no such arrangement having been entered into.
AI factories feed into AI through systems like ChatGPT which breaks language, eg individual words, into components called “tokens” which are then used to “pay” AI providers for their services. Firmus is in the business of generating such tokens. It is a private company seeking to profit from the social need to adopt AI to an increasing range of tasks.
State and feds
The federal government announced in late July that it would introduce a set of Australian Standards for AI governing the operation of data centres. Why Malinauskas has rushed to a Royal Commission in SA when the feds are developing their own policies and procedures is unknown. Someone once said though that government never set up Royal Commissions unless they know the outcome in advance. So perhaps Malinauskas is hoping that the Royal Commission will defuse opposition to the invitation he has given to OpenAI to come and operate in SA. A watertight endorsement of the “financial benefits” and “jobs bonanza” associated with AI would suit him very well.
It is certainly unlikely to pursue the option of AI for the benefit of others than the corporations and their governments.
It is equally very doubtful that it would look at how the people could own and use AI for socially beneficial purposes if it was taken out of the hands of private profiteers.






