South Australia is holding the country's first royal commission into AI. The federal laws are due before it reports.
Peter Malinauskas announced the $3 million inquiry a day after signing an agreement with OpenAI in San Francisco.
South Australia will hold the country's first royal commission into artificial intelligence.
Premier Peter Malinauskas announced it on Monday, a day after returning from the United States and signing an agreement with OpenAI.
The inquiry will cost about $3 million.
Three commissioners will be recruited through an international search, with the terms of reference released in four to six weeks.
Work starts in October and the final report is due by July 1 next year.
Evidence will be taken from business, industry, unions, technology developers, academics and the creative industries.
"It is absolutely clear that the use of artificial intelligence is an exciting opportunity to advance the cause of humanity," Mr Malinauskas said. "But it is also true that, unchecked, 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."
He said Australia was at a "fork in the road".
The day before, at OpenAI's San Francisco headquarters, he signed a memorandum of understanding with co-founder and president Greg Brockman — believed to be the first agreement of its kind between an Australian state and a major AI company.
He also met Anthropic co-founder Tom Brown.
Seventy per cent of his meetings in the United States involved AI or its infrastructure.
"But data centres are simply an infrastructure play," he said.
The rules that would bind those companies are being written somewhere else.
Canberra dropped plans for a dedicated AI Act in December 2025.
On July 15 the prime minister said he would legislate Australian Standards for AI instead, set up an Office of AI inside his own department, and take the framework to national cabinet this month.
Those laws are due in parliament in early 2027, months before the royal commission reports.
South Australia has had a Minister for Artificial Intelligence and Digital Economy since March, when Chris Picton took it on with three other portfolios.
Victoria created the same job last week and gave it to Anthony Carbines, with a brief covering investment and community concern about data centres.
Only one of the two is holding a royal commission.
The state's AI mission statement, released in January, puts the prize at up to $30 billion in gross state product over 10 years.
Mr Carroll's own first act as premier was to call a royal commission — into the construction industry.
Mr Malinauskas said he had "started fiddling around" with Claude and ChatGPT.
"It's impossible to not be utterly impressed by its capability," he said.
His government drove Australia's under-16 social media ban, and he said this was the bigger problem.
"Frankly, I think AI gone bad will make social media look like a walk in the park," he said.
Canberra will have introduced its AI laws before the first royal commission into AI has reported.