Australian artificial-intelligence developers have accused the Albanese government of failing to support homegrown technology companies while directing government business and policy attention towards powerful overseas corporations.Machine Learning & Artificial Intelligence
The criticism follows Prime Minister Anthony Albanese’s declaration that artificial intelligence should be developed and used in Australia’s national interest. His government has promised Australian standards for AI, stronger sovereign capability and procurement policies intended to give local businesses better access to Commonwealth contracts.
However, Canberra-based AI company Xaana.ai says the government’s purchasing decisions do not match its public commitments.
Xaana founder Dan Saldi argued that Australian companies developing foundation models and enterprise AI platforms are regularly overlooked while government departments purchase technology from multinational suppliers. The AFR reported that two leading Australian developers had criticised the government for favouring overseas technology giants despite repeatedly promoting sovereign AI capability.
Xaana has developed Turium, an enterprise AI platform that includes locally controlled large-language-model technology. The company says its systems can operate in secure government, defence and regulated business environments while keeping sensitive information under Australian control.Business & Corporate Law
The Department of Finance lists Xaana as a Canberra-based, entirely Australian-owned supplier offering IRAP-protected technology and AI services. The company says it has worked with more than 50 federal agencies and major private-sector organisations.
Despite those credentials, Saldi said Australian ownership appeared to carry little weight during the early stages of some government procurement processes. According to the AFR report, a government official said a supplier’s Australian status “may” become relevant during later stages of an assessment. Local developers argue that this approach allows foreign providers to establish an early advantage before sovereign capability receives serious consideration.
The dispute comes as the Commonwealth deepens its relationships with major American technology companies.
A new five-year whole-of-government agreement with Microsoft began on July 1, 2026. The arrangement gives federal agencies access to Microsoft 365, Azure, Dynamics 365, security services and Copilot AI products through a standardised government purchasing framework.Government
The government also signed an artificial-intelligence memorandum of understanding with Anthropic in April. Under that agreement, the US developer of Claude will collaborate with Australia on AI safety research, university partnerships, workforce analysis and possible applications within the Australian Public Service. Anthropic has also announced plans to expand its Australian operations and invest in local data-centre capacity.
Local developers do not necessarily oppose working with global companies. Their complaint is that Australian suppliers are being asked to compete against multinational corporations that already possess enormous financial resources, established government relationships and access to global computing infrastructure.
Government procurement can be particularly important for emerging technology businesses. Winning a major public-sector contract can provide revenue, demonstrate that a product meets strict security requirements and help a company attract private investment and overseas customers.
Conversely, when Australian governments consistently select foreign platforms, local developers may struggle to demonstrate their capabilities at home. This can force businesses to seek customers, capital and employees overseas, weakening the sovereign industry the government says it wants to create.Engineering & Technology
Concerns about unequal access are not new.
In 2024, Australian developers criticised a government trial of Microsoft’s generative-AI products because it was established without an open competitive process. Digital Transformation Agency chief Chris Fechner told a Senate inquiry that Microsoft had offered the government a discounted introductory trial. Local companies argued that they had not received an equivalent opportunity to demonstrate their systems.
During the same parliamentary inquiry, Saldi said Xaana had repeatedly demonstrated its technology to public servants and received genuine interest, but agencies remained hesitant to work with smaller Australian AI companies. He called for procurement policies that would allow local businesses to compete fairly rather than automatically directing government agencies towards established global vendors.
The Senate committee later found that sovereign AI capability was important because most artificial-intelligence products used in Australia were controlled by offshore companies. It recorded concerns that the market power of global technology corporations could restrict the growth of Australian competitors and increase the country’s dependence on foreign platforms.Business Operations
The Albanese government insists it is addressing the problem.
Its Buy Australian Plan is intended to improve access to government contracts for domestic businesses, strengthen procurement expertise inside the public service and ensure Commonwealth purchasing provides broader economic benefits.
The government is also developing GovAI Chat, a secure generative-AI service designed for public servants. The platform is expected to allow Australian Public Service employees to use government information with modern AI tools in a controlled environment.
Prime Minister Albanese recently announced that the government would introduce Australian standards for artificial intelligence. The proposed framework will cover issues including safety, national sovereignty, copyright, data-centre energy consumption and the effect of AI on employment.
Yet local companies say regulatory announcements will have limited value unless they are supported by purchasing decisions.Business & Industrial
Australian enterprise-software developer TechnologyOne has separately urged governments to begin buying locally developed AI products immediately. Chief executive Ed Chung said officials who reject a qualified Australian supplier should be required to explain why a foreign product was selected instead.
The debate does not mean global technology platforms should be excluded from government contracts. Microsoft, Anthropic, Google, Amazon and OpenAI offer products with enormous computing capacity, mature security systems and advanced capabilities that Australian agencies may need.
The central question is whether government procurement provides Australian developers with a genuine opportunity to demonstrate that they can meet the same requirements.
Local suppliers argue that tenders should include clear consideration of Australian ownership, domestic research and development, data control, intellectual property, employment and national-security benefits. They also want smaller companies to receive access to trials and proof-of-concept programs instead of agencies approaching only a single multinational provider.Machine Learning & Artificial Intelligence
For the government, the challenge is balancing value for money and immediate technical capability against the longer-term objective of building an Australian AI industry.
Buying a mature foreign product may appear less risky in the short term. However, relying heavily on overseas suppliers could leave Australia dependent on technology, pricing decisions and corporate policies controlled outside the country.
The criticism from Xaana and other developers therefore exposes a contradiction at the heart of Labor’s AI agenda. The government says Australia must develop sovereign capability and ensure the economic benefits of artificial intelligence remain in the country. Local companies say that ambition will remain largely rhetorical until Australian technology is given a meaningful place in government procurement.
Without Commonwealth contracts, domestic developers warn that Australia could become an enthusiastic consumer and host of foreign AI infrastructure rather than an owner and exporter of the technology itself.
