1. The social and economic importance of AI to Australia
1.1 The Australian Government and Microsoft share a positive vision for the potential of AI to drive economic growth, accelerate scientific progress and enhance the delivery of services for the Australian people if it is responsibly harnessed and deployed in accordance with our shared values.
1.2 As a trusted partner in the Indo-Pacific region with world-class research institutions, robust democratic values and a thriving technology sector, Australia is uniquely positioned to shape the responsible development and deployment of frontier AI technologies both regionally and globally.
1.3 Microsoft is committed to upholding Australia’s laws and values so as to maintain strong social license for investment.
2. Addressing economic impacts and promoting supply chain security
2.1 Microsoft intends to continue investing in expanding in-country AI and cloud computing capacity to support Australian AI diffusion and innovation, in addition to the $5 billion investment announced in 2023.
2.2 Microsoft supports and commits to meeting the Australian Government's Expectations for data centres and AI infrastructure developers. Microsoft's global approach to operating as a responsible and trusted provider of digital infrastructure is consistent with the expectations, and Microsoft will continue to align its Australian operations accordingly, including through ongoing, proactive engagement with government, local communities and other stakeholders.
2.3 Microsoft will help to strengthen Australia’s energy supply and transmission, with a focus on additional firmed renewables, and welcomes opportunities to engage with the Australian Government on infrastructure planning in this area. This will complement Microsoft’s investments in renewable energy capacity to support its Australian data centre operations as part of the company’s global efforts to become carbon negative by 2030.
2.4 Microsoft and the Australian Government will explore opportunities to collaborate on forecasting infrastructure needs for frontier AI development and deployment in Australia and the broader region, and on sustainable solutions that can establish Australia as a trusted regional hub.
3. Tracking frontier AI progress and promoting safety and security
3.1 Microsoft and the Australian Government intend to cooperate on frontier AI safety and security research for advanced AI systems in the areas set out in paragraphs 3.2 to 3.4 below.
3.2 In line with its responsible AI commitments, including on safeguards, transparency and human oversight, Microsoft will engage in technical exchanges and collaborative research with safety and security institutions, including Australia’s AI Safety Institute, to advance a shared understanding of frontier AI capabilities, associated risks and effective mitigation approaches. This includes exchanges on frontier governance frameworks, including methods for evaluating high-risk capabilities.
3.3 Microsoft also intends to collaborate with Australia’s AI Safety Institute on human–AI interaction risks, including overreliance, emotional dependency and user behaviour in interactions in AI companion chatbots and conversational AI systems. Microsoft and the Australian Government will also explore research and collaboration opportunities on the broader trust and safety challenges associated with AI systems. The aim would be to help inform additional evidence-based safeguards and responsible deployment practices, particularly to better protect users who may be more vulnerable to experiencing harm online, including young people.
3.4 Microsoft will continue to collaborate with the Australian Government to strengthen Australia’s national and cyber security, including through the Microsoft and Australian Signals Directorate Cyber Shield initiative and cooperation with the Department of Home Affairs on digital resilience.
4. Supporting a vibrant domestic ecosystem
4.1 Microsoft will continue working in collaboration with the Australian Government, including the National AI Centre, and with the Future Skills Organisation, education institutions, unions, businesses and other partners to strengthen Australia’s AI workforce and innovation ecosystem and spread the benefits of AI through national scale skilling, education and capability-building initiatives, including for small-to-medium enterprises, not-for-profit organisations, educators and students.
4.2 Microsoft will continue to support cloud-based development platforms and access programs that enable startups to develop and scale AI-enabled products and services on trusted infrastructure. Microsoft and the Australian Government will also explore opportunities to collaborate on supporting AI research.
4.3 Microsoft intends to continue working with the Australian Public Service (APS) through the governance framework under the Volume Sourcing Arrangement (VSA) between a Microsoft affiliate and the Commonwealth of Australia, represented by the Digital Transformation Agency, and coordinating with the Department of Finance to support delivery of the APS AI Plan, including through capability building and collaboration on delivery of AI across government that enable safe and responsible AI adoption across government.
Nature of the understanding
This MOU is intended as a statement of intent and is not intended to have legal effect.
It does not confer any preferential treatment in Commonwealth procurement processes, grant programs or regulatory decisions, nor does it limit the Commonwealth’s ability to engage in similar interactions with other companies or organisations, nor commit either party to future arrangements. The parties may establish separate arrangements to support specific areas of collaboration consistent with this MOU. Any such arrangements will be subject to their own governance, approvals and legal review. Where appropriate, Microsoft may work with Microsoft Corporation and/or other Microsoft affiliates to progress the objectives set out in this MOU.
Signatories
Signed on 23 April 2026
- For the Commonwealth of Australia as represented by the Department of Industry, Science and Resources, by: Senator the Hon Tim Ayres, Minister for Industry and Innovation and Minister for Science
- For Microsoft, by: Jane Livesey, President of Microsoft Australia & New Zealand