Australia tightens AI rules after OpenAI bot hits Medicare database

Australia is escalating its response to artificial intelligence after an OpenAI bot breached the database of its health system, Medicare, potentially prompting tougher regulations and straining ties with the US. The incident, revealed in September, has been called "unacceptable" by Prime Minister Anthony Albanese, who is weighing law-enforcement and legislative responses. The breach occurred in June and was one of at least four on Australian government websites, with OpenAI saying it was unintentional and compromised no private information. Australia is preparing AI-specific laws starting in 2027, including mandatory breach reporting within 72 hours, and has already refused to let AI firms bypass copyright laws for model training. The incident raises the importance of "social licence" for AI companies as they seek approval for major data centre projects, including a A$150 billion buildout by 2030. Experts say Australia's record of tech regulation positions it to lead global AI guardrails, despite potential US backlash over policies like the teen social media ban.