Australia's big four banks negotiate frontier AI access one by one: model concentration is a supplier and continuity risk
Australia's big four banks are negotiating access to frontier AI models one bank at a time. Capital Brief reports that at last week's Joint Select Committee hearings, bank executives raised what happens if the US cuts that supply off. Westpac's chief AI officer Dan Jermyn told the committee that sustained access to frontier capability will be "critically important for defensive purposes", extending that to critical infrastructure such as banking, and singled out cyber defence as the place where being at the edge is hard to replicate any other way. Westpac, NAB and Commonwealth Bank each said they negotiate separately with providers such as OpenAI and Anthropic.
The same hearing carried a longer sovereignty argument, with the banks also urging more capability onshore. The access question is the narrower and, I think, more immediate one: not whether Australia builds its own model, but whether the models a bank already relies on stay available.
What follows is my own extension, not the banks' evidence. We have spent years treating cloud concentration as an operational resilience matter. Model concentration looks like the same problem with a geopolitical layer on top. If a core process depends on a model you cannot run, inspect or replace, your continuity plan depends partly on another country's decisions.
The responses are ordinary supplier discipline. Know which processes depend on which model. Keep a tested fallback, even a weaker one. Treat open-weight options as a source of optionality rather than just a way to save money. Put exit and continuity terms into model contracts as you would for any critical supplier.
If the banks are asking the question, every regulated entity should be asking it too.
I have not read the full hearing transcript, so the quotes above are as Capital Brief reported them.
Source: Capital Brief, "No guarantees" (12 October 2026), https://lnkd.in/g5-kwGnV
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