A royal waste.

South Australia is launching a royal commission into artificial intelligence. It's kind of a big deal; the state itself says they are "the highest form of inquiry into matters of public importance", with "the power to summons witnesses… and request individuals or organisations to produce documents as evidence".

So what issue is so important today, necessitating such broad and invasive powers and justifying a price tag that Premier Malinauskas expects to run above $3 million?

Artificial intelligence.

I wish I were joking. But Premier Malinauskas, fresh off a taxpayer-funded jaunt to the US where he signed a memorandum of understanding with OpenAI, was apparently convinced by those he met that large language models are too important to be left "unregulated and unchecked":

"[U]nchecked artificial intelligence does represent a material risk to the way our society operates and a risk to the future of work if not thought through carefully… We can choose to set the guard rails and the policy frameworks to ensure that we use AI in a way that puts people first."

There are no terms of reference yet, but it's not too difficult to infer from the poli-speak in the announcement what actionable policy might result. Malinauskas wants to slow things down, spend a bunch of money, pass rules that can be "adopted by state governments and that others may follow", and he wants to do it under the cover of an "independent" inquiry. ChatGPT's prediction of what such a process might recommend is basically an alphabet soup of new regulatory bodies and mandates.

It's a very European approach to technological change, and will come with European-like consequences for economic growth. But hey, maybe that's what South Australians want; to throw more sand into the state's economic gears, suffocating productivity to better "manage" the path of technological progress?

I personally don't think it will work very well, or at least not as intended. I don't doubt that such rules can slow growth. But AI is digital, and it won't be all that difficult for people to bypass whatever "guard rails" the government of South Australia erects.

Curiously, data centres – the only AI-related infrastructure the state actually has the power to stop – are explicitly excluded from the royal commission. Too lucrative to regulate, perhaps?

The fact is innovation is a messy process, and I have zero confidence that an Australian state government will get the regulatory balance right when they can't even fix land use zoning or allow shops to stay open after 5pm. A royal commission with terms of reference that bias it towards recommending more economic friction won't change that. The end result will be a large part of the state unofficially using AI, while rule-abiding folk fall behind their international peers because they won't be able to use as much AI in regulated, customer-facing products.

But perhaps the bigger issue is why a royal commission on AI was called at all. It's just the wrong tool for the job: what are a few justices and a team of bureaucrats in South Australia, with no international authority, going to find that couldn't be discovered through the normal regulatory process? It's not like there's a thriving AI industry in Australia to probe; the country is almost entirely dependent on models developed in the US and China.

All up, the economic cost will be far more than the $3 million sticker-price waste of taxpayer funds. And all because Premier Malinauskas wants to avoid the public scrutiny that comes from making unpopular "guard rail" decisions himself through the normal channels.