By referring in his AI speech to such nation-changing reforms as Medicare and compulsory superannuation, both Labor initiatives, Prime Minister Anthony Albanese signalled his ambition to lead another Labor reform.

This time, the shaping of the AI revolution to benefit everyday Australians, not just the foreign AI behemoths.

Sovereignty was the central theme of his speech on Wednesday.

Albanese made clear that AI must not come at the expense of our economic resilience, our businesses or households, our artists, our environment or our national security.

He warned against a data centre free-for-all, where foreign mega-corporations seek our land, renewable energy and water, but give little to Australia in return.

Australia providing the natural resources for hungry and thirsty data centres, with no value adding, would be a modern-day repetition of Donald Horne’s warning about the “lucky country”, richly endowed in agricultural land and minerals with little else.

In the 1990 federal election campaign, Bob Hawke’s pledge was to transform Australia from the lucky country to the clever country by investing in universities, science and research.

The challenge was to integrate Australia into rapidly emerging Asia, while ensuring the benefits flowed to Australia.

Being satisfied with Australia as just real estate for data centres would constitute a reversion to the lucky country.

Albanese sees the opportunities of AI as integral to achieving a “Future made in Australia”. He warns against “subcontracting our sovereignty and security to the control of foreign monopolies”.

His ambition is for Australia to lead in cybersecurity, biotechnology and advanced manufacturing. That would involve more Australian companies, as well as global multinationals, developing AI here.

By doing so, we can boost our sovereign capability and strengthen our national security.

Relying overwhelmingly on foreign AI giants for the development of AI would be inimical to Australia’s national security.

We had a taste of that vulnerability last month when the Trump administration temporarily banned the export of AI platform Claude Fable, built by Anthropic.

The US government did this on national security grounds – its concern was that a side door had been left open, allowing bad actors to use Fable to create cyber or biological weapons. Anthropic disputed this, but was obliged to comply.

Although a safer version has been cleared for release, this should serve as a warning that we must not be overly dependent on a single provider for Australia’s AI capability.

As a close US ally and member of Five Eyes intelligence alliance, Australia is in a stronger position than most nations to benefit from America’s AI juggernauts.

But the recent export ban on Fable is a lesson to take AI supply risk seriously, just as Covid-19 was for supply chains more generally.

AI will transform Australia and the world. It promises huge productivity improvements, but also creates new risks cutting across all parts of our society.

As with Bob Hawke’s plan for a clever country and integration of the Australian economy into Asia’s, Albanese’s Office of AI will need to steer carefully between AI’s promise and its risks.

Craig Emerson is a former trade minister in the Gillard government and was an adviser to Bob Hawke in developing policies for “The Clever Country” in 1990

Ben Emerson is a defence and national security specialist, and founder of Klara, an AI-powered startup