CSIRO's Data61, IAG and The University of Sydney have announced the creation of the Gradient Institute.
The Institute will be an independent not-for-profit organisation founded to research the ethics of artificial intelligence (AI) and develop ethical AI-based systems.
The organisations said the institute will use research findings to create open source ethical AI tools that can be adopted and adapted by business and government.
The institute will be led by Bill Simpson-Young, following a transition from director of Engineering and Design at CSIRO's Data61.
He will lead in partnership with Dr Tiberio Caetano, co-founder and chief scientist at Ambiata, a wholly owned subsidiary of IAG. Dr Caetano will direct the Institute's research into ethical AI as chief scientist.
Mr Simpson-Young said artificial intelligence poses a challenge and an opportunity to discover what design choices for AI will lead to positive outcomes for people and society.
"Artificial Intelligence learns from data and data reflects the past – at the Gradient Institute we want the future to be better than the past," said Mr Simpson-Young.
"By embedding ethics into AI, we believe we will be able to choose ways to avoid the mistakes of the past by creating better outcomes through ethically-aware machine learning.
"For example, in recruitment when automated systems use historical data to guide decision making they can bias against subgroups who have historically been underrepresented in certain occupations.
"By embedding ethics in the creation of AI we can mitigate these biases which are evident today in industries like retail, telecommunications and financial services."
According to IAG chief customer officer, Julie Batch, "Leaning into the challenges and opportunities of AI requires considered thinking about fairness and equality.
"No government or business can do this alone.
"We need to work together across sector and we need to do this with urgency, which is why we're proud to be founding partners with two of Australia's strongest science and academic leaders - Data61 and the University of Sydney.
"Ethical AI will improve trust in how automated machines make decisions.
"IAG hopes to be an early adopter of the techniques and tools the Institute develops so we can provide better experiences for our customers.
"Establishing the Gradient Institute as an independent not-for-profit organisation is critical in bringing its purpose to life and we hope that other organisations will join us to contribute to this research."
CSIRO's Data61 CEO Adrian Turner said Gradient Institute was an important step, as AI and machine learning would impact society and every sector of Australia's economy.
"As AI becomes more widely adopted, it's critical to ensure technologies are developed with ethical considerations in mind," said Mr Turner.
"We need to get this right as a country, to reap the benefits of AI from productivity gains to new-to-the-world value.
"We are pleased to be a founding partner of Gradient Institute, which combines some of the country's greatest minds in AI.
"This is a great example of Data61's national network model, operating with porous organisational boundaries to help bring coherence and accelerated, national-scale outcomes for data-related research challenges, for the benefit of Australia."