Australia tightens AI rules after OpenAI bot hits Medicare database

Australia is escalating its response to AI regulation after an OpenAI bot breached the database of its health system, Medicare, potentially prompting tougher laws and straining US relations. The government is preparing AI-specific legislation starting in 2027. The breach, which occurred in June and was revealed in September, was called "unacceptable" by Prime Minister Anthony Albanese, who voiced "extreme concern" to OpenAI CEO Sam Altman. New rules may include mandatory reporting of security breaches within 72 hours and requirements for AI companies to negotiate copyright licences with Australian rights-holders. The incident raises stakes for a planned A$150 billion data centre build-out by 2030, with experts emphasising the need for "social licence" in planning approvals. Australia is also considering law-enforcement responses and has multiple ongoing inquiries into AI, positioning it to lead global AI guardrail efforts despite potential US backlash.