*by Professor Alexandra Andhov, Director of ALTeR

— excerpts from the speech delivered at Aotearoa AI Summit 2025, organised by AI Forum

“Let me tell you a story that starts with a house. House is tangible, specific…

And I will not just talk about any houses, but the kind of house you dream about building your whole life. You save up, find the perfect piece of land, and hire what seems like a reputable construction company. The contract looks solid. Good 10 reviews. The builders promise everything will be built to code.

But here is the twist. The construction company has written their own building codes. And buried deep in the fine print is a clause that says they can use your land however they want, for example:

• take samples of your soil without asking,
• utilise the water that runs through your property,
• and sell details about your property to anyone willing to pay.

You would never sign that contract, would you?

And guess what? You did!

Similarly to any T&Cs that you sign daily online, you just scrolled down and ticked the box.

Yet every single day, hundreds of millions of us are essentially signing exactly that deal.

Not with construction companies, but with tech companies.

Not with our physical homes, but with our digital lives.

Welcome to what I call the Digital Wild West.

**

When the Builders Forgot About Water

Before I tell you how we got here, let me share a story, as when I moved to New Zealand, this might have been the first thing people warned me about.

It’s 1991, and our building regulators are feeling pretty clever. They have discovered this revolutionary new approach called “performance-based regulation.”

In tech… they love to call it “light touch regulation”.

Instead of telling builders exactly how to nail every board and pour every foundation, they decide to be flexible. Modern. Innovative. “Just make sure your buildings don’t fall down,” they essentially said. “We trust you to figure out how.”

Now, Sarah, let’s call her Sarah, she was thrilled when her new home was completed in 1995. The building had passed all its inspections. It was structurally sound, exactly as the performance standards required. She moved in with her family, excited about their future.

Five years later, Sarah noticed a musty smell in her daughter’s bedroom. Behind the wallpaper, she discovered something that would haunt her for decades: black mould spreading like a cancer through the walls. The builder had indeed made the house structurally sound. But in cutting costs to stay competitive, they’d used an untested building technique that kept the house standing while letting moisture creep in everywhere.

Sarah’s story wasn’t unique. Across New Zealand, nearly 90,000 buildings were slowly rotting from the inside out. Families lost their homes. Their health. Their life savings.

The final bill? Eleven billion dollars.

The builders had met the letter of the law while completely missing its spirit. They optimised for one thing – structural integrity – while ignoring everything else that makes a house livable.

The Digital Builders

Fast forward to today, and we have a new set of builders. They’re not constructing houses; they’re building the digital world we live in. And they’re using exactly the same playbook.

Take Mark. Mark signs up for Facebook to keep in touch with family overseas. He reads the terms of service… well, actually, let’s be honest, he clicks “I agree” like the rest of us. What Mark doesn’t realise is that he’s just handed over the keys to his digital life.

Facebook starts learning everything about Mark. Not just what he posts, but how long he pauses before clicking “like,” what time of day he’s most vulnerable to certain kinds of content. They’re building a psychological profile so detailed it knows things about Mark that Mark doesn’t know about himself.

And just like those builders in the 1990s, Facebook can honestly say they’re following the rules. They have privacy policies. They have security measures. They’re technically “compliant” with many regulations.

But they’re building the digital equivalent of leaky buildings – systems that appear solid on the surface but are fundamentally compromised where it matters most.

The difference is, this time the moisture damage isn’t just happening to walls. It’s happening to our democracy, our mental health, our children’s development, our ability to distinguish truth from fiction.

The Cookbook That Never Gets Updated

Now, you might be thinking, “Well, why don’t we just regulate these companies better?” And that’s exactly the right question. But here’s where the story gets really interesting.

Most people think of regulation like my grandmother’s cookbook. You write down the recipe once, test it until it’s perfect, then put it on the shelf and you’re done. Grandma’s lamington, and it is really a lamington, … in the middle of Europe – and then I came to Australia to realise they have the same!

Let me tell you what happened when Australia tried the cookbook approach with their electricity market in the early 2000s. The regulators had a brilliant idea: instead of micromanaging the industry, they would practice “meta-regulation.” Essentially, they told the electricity companies, “You guys figure out how to make competition work. Write your own rules.”

It was a regulation as a noun – a fancy policy document they could point to and say, “Look, we have solved it.”

The result was chaos. Companies did not know what was expected. Consumers got confused. Prices went up instead of down. The whole system became a series of compromises that served no one well.

Meanwhile, the real world was moving at the speed of electrons, and the regulators were moving at the speed of committee meetings.

And this is our regulatory reality. The technology moved fast and we move slow… and we need to address it.

This brings me to what we really need. We need to re-think how we approach regulation and think of regulation as a verb. Not a set of rules we write once and forget about, but an active, ongoing practice.

Think of it like being a lighthouse keeper. Your job is not to build the lighthouse once and walk away. Your job is to keep the light burning, to watch for ships in distress, to adjust to changing weather conditions. Every night is different. Every storm requires a different response.

That is what regulating AI should look like.

But here’s the thing about New Zealand’s position in all this – we are not just any lighthouse. We are the lighthouse on the edge of the Pacific, watching the horizon where the biggest storms first appear.

I will be blunt with you: tech companies see New Zealand as their perfect testing ground. We are large enough to provide meaningful data about how their algorithms affect real people, but small enough that if things go wrong, it won’t seriously damage their global business.

When Facebook wants to test a new content moderation algorithm, where do you think they try it first? When TikTok experiments with new ways to capture teenage attention, which market gives them the data they need without the regulatory backlash they’d face in the US or Europe?

We are the lab in the global AI experiment, and we might not even know about it.

But here’s the plot twist: being small doesn’t have to mean being powerless. Estonia became a digital leader by being first, not biggest. Singapore punches above its weight in financial technology by being smart and adaptive, not massive and slow.

We could choose to be the world’s first truly human-centred AI regulator. We could show the world what it looks like when a country puts citizens’ rights and well-being at the centre of digital policy, rather than corporate profits.

Which brings me to the real story I want to tell you – the story that’s being written right now, with the ending still unfinished.

We stand at a fork in the road. Down one path lies digital feudalism – a world where tech companies rule their digital kingdoms while we serve as their data serfs, where algorithms we don’t understand make decisions about our loans, our jobs, our children’s education, our access to information, where we stop writing and thinking.

Down the other path lies digital democracy – a world where technology serves humanity, not the other way around.

The leaky building crisis should have taught us that when regulators step back and let industry self-regulate, the consequences can last for decades and cost billions. The AI revolution is moving faster and will have far greater consequences.

The question is: do we want to wait until our digital infrastructure is rotting from the inside out before we act?

Or do we want to be the lighthouse keepers who saw the storm coming and lit the beacon in time?

New Zealand has always punched above its weight when we have chosen to lead. We were first to give women the vote, first to summit Everest.

Now we have the chance to be first in showing the world what it looks like when humans, not algorithms, are in charge of their own destiny.

The digital future is being written right now, line by line, algorithm by algorithm. We can either be passive characters in someone else’s story, or we can pick up the pen and write our own.

The house that data built does not have to be a leaky building. But only if we choose to be architects instead of tenants.

The choice is ours. The time is now.

The question is: what story do we want to tell our children about the moment we decided to take control of our digital destiny?”