Appearing before a federal parliamentary inquiry into AI, OpenAI chief strategy officer Jason Kwon reiterated that the breach of a data portal linked to Australia's Medicare system by an agent in June should not have happened.

"We are sorry and we know we have work to do to rebuild trust with the Australian people," he said, acknowledging that OpenAI should have handled its response to the incident better after the federal government said it was not reported until September.

Kwon said that the incident prompted OpenAI to impose additional monitoring to allow immediate intervention by staff to stop training if a model accesses the internet in a way it is not supposed to and that the company would support Australia imposing a mandatory reporting framework for similar incidents.

Asked during the hearing if an OpenAI model could breach Australian critical infrastructure, such as water, gas or oil facilities, Kwon said it would depend on security.

"We don't know because it's going to depend on the safeguards and the infrastructure and security controls that particular company and provider has in place," he said.