Australia faces a growing tension between keeping global tech giants accountable and depending on them for national security. Google’s plan to build a large artificial intelligence data centre on Christmas Island — a key strategic location in the Indian Ocean — highlights both the opportunity and the risk.

The project, linked to a Defence Department cloud deal, could give Australia cutting-edge AI capabilities for military and surveillance use. Defence experts say the site’s location near vital sea lanes makes it ideal for monitoring regional naval activity, while subsea cables to Darwin will ensure secure, high-bandwidth connections. Local leaders cautiously welcome the plan, hoping for jobs and better infrastructure, but some residents fear the island will become a military target.

At the same time, concerns are mounting that Australia’s ability to oversee companies like Google is weakening. The Australian Competition and Consumer Commission’s world-leading digital platforms unit — which created the News Media Bargaining Code and exposed anti-competitive practices by Meta and Google — has reportedly been reduced from more than 30 staff to around 10.

Senators David Pocock and Nick McKim have urged the Albanese government to restore funding, warning that dismantling the unit undermines global efforts to hold tech giants to account, especially as generative AI models such as Google Gemini and ChatGPT rely on copyrighted data.

The government insists the expertise has merely been folded into a larger “digital and scams” division, but critics say that move dilutes focus and independence.

While Australia deepens defence partnerships with Silicon Valley, it risks losing its reputation as a global leader in regulating the same companies it now depends on. The question is whether it can maintain both technological advantage and democratic oversight — before the balance of power slips too far toward big tech.