The federal government released its National AI Strategy this week, confirming it has dropped its earlier proposal for mandatory guardrails for high-risk artificial intelligence (AI).

In responding to AI, the government has found itself caught between the unions, which have pushed for stricter regulation to protect workers and their jobs, and business wanting a“light-touch” approach to AI.

To talk about how the government will keep up with effectively managing AI, as well as a long-overdue response to a“jobs for mates” review, we're joined by the minister for industry, innovation and science, Tim Ayres.

On the government's decision not to introduce AI-specific laws, Ayres denies the Albanese government ended up going with a“light-touch” approach.

On whether the rollout of AI will lead to some mistakes as Australian workers and industry get used to the technology, Ayers acknowledges there will be some“bumps”:

Drawing on examples he's seen in his role as minister for science, Ayres says AI had could deliver real benefits for Australians over the next five to ten years.

But with that rapid expansion comes real costs, including the vast amounts of electricity and water data centres consume.

Ayres said he'll resume working with state and territory governments on developing“data centre principles” very early next year. The Sydney Morning Herald and others have reported that the government is weighing up making new data centres invest in big wind and solar projects or else build their own batteries on-site.

Ayres says if data centres and new digital infrastructure end up paying for new generation and transmission capability,“that's a net addition to the electricity system, not a drain on resources”.

Following week's release of the review into“jobs for mates” – which the government held onto for two years and now declines to accept all recommendations – Ayres argues Labor“done has a lot to restore integrity” since being elected in 2022.

Read more: Albanese government shies away from tougher recommendations from 'jobs for mates' inquiry

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