South Australian Premier Peter Malinauskas has announced a royal commission into artificial intelligence, warning that rogue AI without sufficient guardrails could inflict catastrophic societal costs.
Malinauskas, who just returned from a trip to the United States where he signed a memorandum of understanding with OpenAI to explore ways of improving productivity in the state public service, said he wanted big American companies like OpenAI and Anthropic to be part of the royal commission.
“AI gone bad will make social media look like a walk in the park,” the premier said on Monday. He stressed that public policy must move faster to ensure AI serves humanity rather than operating unchecked.
The royal commission will start on October 1 and report back by July 2027.
“Only governments, only parliaments, have the tools and the resources to ensure that people are at the centre of the advancement and the rollout of AI-related technologies and industries,” he said.
Malinauskas, who unveiled the plan on Monday afternoon in Adelaide, revealed he had not informed Prime Minister Anthony Albanese before making the surprise announcement.
He acknowledged the inquiry would cost well above $3 million and require three commissioners, but argued the investment was essential.
“The cost of a royal commission really is chicken feed in comparison to the cost to society if we don’t think through the complex questions that are going to be asked of us with the deployment of this technology,” he said.
Daniel Petre, co-founder and partner emeritus of venture capital firm Airtree Ventures and board member of the National Reconstruction Fund, dismissed the royal commission as a pointless exercise with little bearing on the global AI industry.
“This seems beyond bizarre. I do not understand what a royal commission will unearth that is not already clear in terms of the trajectory of the technology and the opportunities and threats,” Petre said.
“It seems a colossal waste of money … if California struggles to change the trajectory or deployment of AI I am pretty sure South Australia will struggle. But hey, good on them for trying.”
Malinauskas maintained it was crucial that governments lead on AI stating, “Never before in human history have we contended with a world where there is something we’re working with that is smarter than us. Now we have it”.
The premier said AI represented the biggest technological shift since the Industrial Revolution and the royal commission would be a success if its recommendations were ultimately adopted by state governments nationwide.
The Malinauskas government was a pioneer in banning under-16s from having social media accounts in legislation implemented in late 2025, a forerunner to nationwide laws introduced by the federal government.
“I think humanity has some profound choices in front of it when we think about the adoption and use of AI. I think we are at a fork in the road,” Malinauskas said.
“We don’t want this to run forever because, frankly, we don’t have forever to get this right. We’ve got to get the balance right here.”
In June, the South Australian government released a data centre strategy aimed at attracting further industry investment. About the same time, Nasdaq-listed Iren – founded by Australian brothers Daniel and Will Roberts – announced a $10 billion data centre project in Bundey, an uninhabited township 165 kilometres north-east of Adelaide.
Malinauskas said data centres were “a piece of infrastructure”, and what matters much more is the way the technology they allow is used in society.
Speaking to The Australian Financial Review during his US trip, Malinauskas noted that a growing American backlash against data centres highlighted the need for clear investment frameworks. However, he maintained that the infrastructure boom could unlock new green energy generation in South Australia and lower power bills.
“There are … some places where they’ve let it rip with data centres, and it has had consequences,” he said.
Laina Chan, practising barrister and founder and CEO of MiAI Law, a legal AI research and risk management system, said she hoped a royal commission would set expectations about how AI was being used in the legal system and other specialised professions.
“An inquiry of this kind is needed. Whether a royal commission is ultimately the best mechanism is open to debate, but it is a good way to get the ball rolling on some very important questions that Australia needs to confront now,” she said.
She said lawyers and doctors spent years developing judgement, not simply accumulating information. This meant they could learn how to distinguish relevant from irrelevant authority or evidence, and make correct choices, where AI could not.
“That judgement is the product of years of structured education, supervised practice and professional accountability,” Chan said.
“When someone treats a plausible AI-generated answer as though it were the advice of a trained lawyer or doctor, the consequences can be dire and even potentially catastrophic.
“That is one of the issues I would want a royal commission to examine carefully: where AI can safely augment human expertise, where human professional judgement must remain central, and what safeguards are needed when AI is being used in circumstances where people may rely upon its answers.”
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