Australia cannot afford to wait before it develops its own artificial intelligence capacity, data centre companies have warned.
A government inquiry into AI will spend its second day grilling industry giants about how they are managing tech expansion across the country.
Technology oversight needs to be spearheaded domestically instead of relying on overseas capability, AI infrastructure firm ResetData said in a submission to the inquiry.
Not doing so risked allowing our tech capability to be bled by other nations.
"(We) need to retain enough local infrastructure, skills and operational capacity to run strategically important workloads under Australian ownership and control when required," the submission read.
"That capability cannot be created quickly once it becomes urgent."
It comes as communities raise concerns about data centres being built in suburban areas with little consultation.
Macquarie Technology, a domestic data centre firm, said Australia would only benefit from the boom if it invested in locally-owned centres.
"Physical location alone does not guarantee sovereign control. The decisive questions are who owns and controls the model ... and whether access can be assured in a crisis," the firm's submission said.
The inquiry will probe AI safety companies, including Gradient Institute and Global Shield, along with data vendors, on the work they are doing.
It is a critical time for the AI industry, as companies fight to increase sovereign capacity and convince Australians they are worth investing in, even at risk of personal inconvenience.
Some states, including Victoria, have cracked down on data centre companies and no longer allow them to build warehouses in residential areas.
In NSW, the Lane Cove community successfully campaigned against plans for a now-scrapped centre just 150 metres from a school. Other neighbourhoods are following suit.
Then there are the industry elements.
On Tuesday, one of Australia's most successful AI companies, Firmus, confirmed it has fallen out with partner CDC.
The organisations had different views on how to increase the nation's capacity and will instead work alone.
Firmus is expected to become ASX-listed later in October and will then be worth about $44 billion.
