Executive Briefing: Wednesday 9 September

Executive Summary Today's briefing highlights critical shifts in AI governance, consumer data privacy, and Australian digital regulation. OpenAI's new model raises safety concerns over opaque reasoning, while California faces challenges in enforcing data deletion. Australia introduces new laws granting users control over social media algorithms and enhancing protections for minors, alongside a landmark shift in local vehicle sales where electric vehicles have outsold petrol cars for the first time. OpenAI's Astra Raises AI Safety Concerns OpenAI's forthcoming Astra model, utilising a technique called "recurrent depth," is sparking significant debate among AI safety researchers. This architecture allows the model to cycle through internal computational layers without producing readable intermediate output, making its reasoning less transparent than previous models. This development is particularly concerning as Astra is classified by OpenAI as potentially capable of autonomously discovering and exploiting unknown security vulnerabilities. The shift, driven by performance and cost incentives (a 14x cost difference for agentic coding workloads), creates a structural governance blind spot for enterprises, as existing security tools are not designed to monitor such configuration changes. OpenAI's chief scientist concedes that chain-of-thought monitoring, a critical safety tool, is "fragile" and "trending in a negative direction," underscoring the growing challenge in auditing advanced AI systems. California's Data Deletion Program Faces Resistance California's new "DROP" program, designed to enable residents to have their personal information deleted by data brokers, is encountering resistance and potential non-compliance from companies. New research from Stanford University suggests that over 600 data brokers registered with the state have a history of failing to follow existing privacy laws. This initiative, part of the 2023 Delete Act, highlights the ongoing challenge of enforcing consumer data rights against entities that profit from collecting and selling personal data, including sensitive location information. The friction underscores the need for robust compliance frameworks and places increased burden on businesses to manage customer data effectively to avoid regulatory scrutiny and reputational damage. Australia Introduces 'My Feed, My Way' Social Media Controls Australia is moving to empower users with new draft Digital Duty of Care legislation, forcing social media platforms to offer a choice between algorithmic and chronological feeds. The "My Feed, My Way" initiative requires platforms to notify users over 16 of this option, allowing them to opt out of personalised content recommendations. Additionally, the new rules will mandate online games, apps, and AI chatbots to protect under-18s from design features leading to negative behavioural impacts, such as addictive elements, and from harmful content promoting eating disorders or glorifying crime. The eSafety Commissioner will have powers to issue removal notices for "nudify" apps and impose penalties up to $109.2 million for non-compliance, signalling a significant regulatory push towards platform accountability and user autonomy. Electric Vehicles Outsell Petrol Cars in Australia for the First Time Australia has reached a landmark moment in its automotive market, with electric vehicles outselling petrol cars for the first time in August. More than 27,000 battery electric vehicles were sold last month, making up 24.9% of all new vehicle sales and surpassing the 25,824 petrol car sales. This 171% jump in EV sales compared to the previous year signifies a rapid shift in consumer preference, driven by the federal government's Electric Car Discount and investments in charging infrastructure. Combined, battery electric, plug-in hybrid, and conventional hybrid vehicles now account for over half of all new vehicle sales, underscoring a broader market transition away from traditional petrol engines and impacting associated industries like convenience retail and fuel services. Retailers Need Actionable AI, Not Just Analytics Convenience retailers are shifting their focus from AI that merely provides data analysis to systems that drive actionable decisions and operational efficiency. The challenge is no longer data acquisition but extracting relevant signals and acting on them quickly. Nayax's MoMa mobile app exemplifies this, offering an AI Assistant for business queries, product-mix recommendations, and visual recognition for planogram creation. This approach prioritises reducing manual work and supporting human judgment with timely intelligence, rather than overwhelming operators with more dashboards. The goal is a shorter path from data generation to implementing beneficial decisions, directly improving profitability and efficiency for time-poor operators in the competitive retail landscape.