AI Industry Creates New Age of Imperial Extraction
AI vendor due diligence is an emerging APS procurement consideration - labor conditions and environmental disclosures extend well beyond model performance.
Key points
- Journalist Karen Hao's reporting links OpenAI-contracted data-labelling work in Kenya to low pay and psychological harm.
- APS agencies procuring AI services or compute infrastructure face analogous vendor due-diligence obligations under APS values and procurement rules.
- Figures cited rest on a single journalist's account and a rebroadcast - not independently audited or new reporting.
Implications for Australian agencies
- Consider APS procurement and AI governance teams could consider whether existing vendor risk and ESG frameworks adequately cover data-labelling labor conditions and data centre resource-use disclosures for AI-related contracts.
- Monitor Teams involved in AI procurement may want to monitor whether Australian government procurement guidance evolves to address AI supply chain labor and environmental standards explicitly.
Implications are AI-generated. Starting points, not advice — see methodology for how they're framed.
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Appeared in:
Weekly digest, 29 June 2026
"AI Industry Creates New Age of Imperial Extraction"
Source: Let's Data Science – AI Governance
Published: 3 July 2026
URL: https://letsdatascience.com/news/ai-industry-creates-new-age-of-imperial-extraction-4d5ae676
A Democracy Now! interview rebroadcast of journalist Karen Hao's reporting from her book Empire of AI describes OpenAI-linked data-labelling workers in Kenya paid a few dollars an hour or less to review graphic content, and a Google-linked data centre near Santiago, Chile reportedly seeking water use roughly a thousand times a local community's annual draw. The item frames these as vendor due-diligence signals for AI buyers - extending risk assessment to labor sourcing and infrastructure siting, not just model performance. Specific figures are drawn from Hao's own reporting rather than independently audited sources, and the interview is a rebroadcast rather than new news.
Implications for Australian agencies:
- [Consider] APS procurement and AI governance teams could consider whether existing vendor risk and ESG frameworks adequately cover data-labelling labor conditions and data centre resource-use disclosures for AI-related contracts.
- [Monitor] Teams involved in AI procurement may want to monitor whether Australian government procurement guidance evolves to address AI supply chain labor and environmental standards explicitly.
Retrieved from SIMS, 18 July 2026.