Prime Minister Anthony Albanese hosted premiers and chief ministers in Sydney for a national cabinet meeting on Wednesday, where leaders discussed a national agreement on data centre regulation, including a contentious mandate for developers to provide renewable energy.
The plan has faced a backlash from Queensland and the Northern Territory, which have called for data centres to be backed by coal and gas reserves.
The prime minister said while states had different issues at play, a unified approach was still needed.
"We have buy-in on Australia's national AI laws," he told reporters.
"I'm very confident that we'll move forward with every single jurisdiction making a difference ... we don't have eight different systems operating around the country.
"That's why we came to a common position, which recognises that all states aren't exactly the same, and that was accommodated in the way that we normally do in a flexible way."
Draft legislation is set to be unveiled by the end of 2026, with the laws planned to come before federal parliament in early 2027.
A communique of the meeting said AI represented a generational opportunity for Australia if it was harnessed properly.
"First ministers agreed that large data centres bring material energy, water and land-use impacts that need to be managed," it said.
"Commonwealth legislation will be designed to complement, not duplicate, state and territory planning and approval processes."
Queensland had a point of different for its energy mix, Premier David Crisafulli said.
"We believe that we can control our data sovereignty, protect the rights of local communities, and enable that energy mix to bring those data centres on," he said.
"We own distribution, transmission, generation and that enables us to control that energy mix, and we've done that well."
Before the national cabinet meeting, Northern Territory Chief Minister Lia Finocchiaro said the federal government was being overbearing on its approach to AI.
"What they should not be doing is trying to impose rules on states and territories when they, under their own steam, are able to make these decisions for themselves for their people," she told ABC Radio.
The chief minister said the territory's Beetaloo Basin gas reserve would be more than adequate to power data centres.
"We can properly provide the energy in abundance to every Australian, to every data centre, to every ally that needs it," she said.
"That's the scale of the resource we're sitting on, which is why we need a different approach for the territory."
While the prime minister said a social licence by tech companies was critical, AI expert Toby Walsh said developers of data centres had failed on that front.
"They're rapidly losing the public's consent for what they're doing," the University of NSW professor told AAP.
"As they have already lost in the United States, where many states have actually put a moratorium on building new data centres."
The Australian Energy Market Operator reported 165 data centres in operation across Australia with 225 in development.
Opposition energy spokesman Dan Tehan said the prime minister had been rolled by national cabinet on the AI issue.
"Anthony Albanese and Chris Bowen's renewables-only energy plan for data centres has barely lasted a month," he said.
"States and territories should be empowered, not punished, for choosing the energy sources that best meet their needs."
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