‘Cyber shield’ to be key part of $5b Microsoft investment in Australia

Australia’s online spy agency will join Microsoft to build a “cyber shield” to protect networks from security threats as part of a $5 billion investment by the tech giant in local projects.

Prime Minister Anthony Albanese will reveal the plans with Microsoft president Brad Smith on the first day of his visit to the United States, promising new jobs in fields such as cloud computing and artificial intelligence.

Prime Minister Anthony Albanese and his partner Jodie Haydon arrive in the US for a state visit.Credit: Alex Ellinghausen

A key component will be an agreement between Microsoft and the Australian Signals Directorate to toughen protection against online threats, in an example of the business and security agendas in the four-day visit to Washington DC.

Albanese will meet US President Joe Biden before a state dinner at the White House on Wednesday night to be attended by political and business leaders.

But other parts of the agenda have been thrown into doubt, with chaos over the selection of a new Speaker for the US House of Representatives dashing Australian hopes for the prime minister to address Congress.

Ahead of Albanese’s arrival, current and former officials called for attempts to step up progress on the long-awaited AUKUS security pact amid concerns the submarine deal could be put on the back-burner once Americans enter an election year in 2024.

“I think one of the messages the prime minister will convey is that a lot of our decisions hinge on being able to get this legislation through,” said former US ambassador Arthur Sinodinos, who now works for the business advisory firm The Asia Group.

“There’s a lot of work that has to be done between now and the end of the year, and it’s in America’s own interest not just to pass the AUKUS legislation but to get the National Defence Authorisation Act as soon as possible because next year will be an election year and once we get into the silly season, the circus will be on and it’ll be very hard to focus on anything substantive.”

The pathway to provide Australia with nuclear submarines to help safeguard the Indo-Pacific was unveiled by Biden, Albanese and British Prime Minister Rishi Sunak in March.

However, multiple pieces of legislation still need to be passed to make AUKUS a reality. Complicating the situation is the paralysis in the US Congress, which has been without a Speaker for weeks after top Republican Kevin McCarthy was ousted by a small group of rebels in his own party.

“My Democratic colleagues and I continue to stand united and ready to negotiate with the Republican majority to find a bipartisan way forward and ensure the Republicans’ infighting does not stall this urgent business,” said Democrat Joe Courtney, the co-chair of Congress’ so-called “AUKUS caucus”.

Courtney has previously echoed Sinodinos’ concerns about the volatile election year ahead, saying recently that “the surest, least risky route” would be to get the AUKUS enabling legislation “enacted now and just avoid any unexpected surprises” in 2024.

Australia’s ambassador to the US, Kevin Rudd, said AUKUS needed to be dealt with urgently.

While progress was “trending in the right direction”, he said on Monday, there were “still many bumps to iron out”.

“Frankly, we can’t just sit around forever on this. We’ve got to get started. That’s why both the US administration and our friends in the congressional leadership are doing whatever we can to push this through.”

In brief remarks after his arrival, Albanese said he wanted the visit to turn the AUKUS agreement into reality, build closer economic ties and take the next step on his agreement with Biden to expand the supply of critical minerals for advanced technology products and renewable energy.

“The relationship between Australia and the United States is so important in today’s turbulent world,” he said at Blair House, the historic home near the White House that is sometimes offered to foreign leaders on state visits.

“It is a relationship that provides security and stability, based upon our common values and our position as great democratic nations working together to promote those values throughout the Indo-Pacific and throughout the world.”

US ambassador Kevin Rudd and his wife Therese Rein greet Anthony Albanese and Jodie Haydon at Joint Base Andrews.Credit: Alex Ellinghausen

The Microsoft investment comes at a time of increasing collaboration between Australia and the US on security, driven in part by concern among the Five Eyes security allies about relying too heavily on technology from China.

Australian Security Intelligence Organisation director-general Mike Burgess named China as a source of concern during a rare tech summit a week ago in Silicon Valley with his Five Eyes counterparts from the US, United Kingdom, Canada and New Zealand.

Microsoft will make the $5 billion investment over the next two years to build new data centres for cloud computing and artificial intelligence infrastructure. The company has recently gained approval for a large data centre campus at Kemps Creek in Western Sydney, part of an expansion of its network from 20 to 29 sites in Sydney, Canberra and Melbourne.

It is also pledging to train 300,000 Australians for jobs in cloud computing – based on the processing and storage of information at remote data centres – and artificial intelligence.

The Microsoft-ASD cyber shield will form part of the government’s cybersecurity strategy.

“This is a big deal for our tech sector,” Industry Minister Ed Husic said.

“Australia is one of the world’s most advanced users of cloud technologies and this investment will keep us at the forefront.”

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