Australia to mandate AI breach reporting, create regulator after OpenAI breach

Australia will require artificial intelligence ⁠companies to ⁠report breaches and consider changes to criminal law to address "serious misconduct", Prime Minister Anthony Albanese said on Tuesday, after an OpenAI agent broke into a government website.

The OpenAI agent ‌gained unauthorised access to the medical statistics portal ‌of ‌Medicare, Australia's universal health insurance programme, while ‌conducting research on public medical spending, the ⁠government said in September. The breach triggered a rapid government review into the incident.

Albanese said his government had accepted all recommendations of the review.

"(The recommendations) include mandatory AI company reporting when ​it comes to misaligned behaviour or cyber incidents, and consideration of reforming criminal law in cases of serious ⁠misconduct," Albanese told reporters.

"The law needs to get ahead of, and in some cases, make sure that it catches up with what is a very fast-changing world."

OpenAI has said it learned of the breach only in August and that the incident was unintentional. Its review found no evidence that patient records were accessed by the agent.

The breach has added to friction between ​Australia and US technology companies, after Canberra refused ⁠ChatGPT maker OpenAI and rival Anthropic exemptions ⁠from copyright laws for model training, instead requiring them to negotiate licensing agreements with Australian ​rights holders.

However, both companies told Australian parliament last month that ‌they would welcome ⁠laws requiring them to report data breaches carried out by their AI agents, acknowledging the decision to notify was currently at their discretion.

Albanese said his centre-left ‌Labor government would set up an AI regulator to oversee security controls throughout the development and deployment of AI systems, identify serious risks and conduct independent evaluations of AI models.

"The AI ​safety regulator will be able to enforce significant penalties for AI companies doing the wrong thing," he said.

The mandatory AI safety and security protections will form ‌part of ⁠the government's proposed AI legislation, ​Albanese said, which it plans to introduce in Parliament next year.

(Reporting by Renju Jose in ​Sydney; Editing by Christian Schmollinger and Saad Sayeed)