The state government of South Australia (SA) on Monday announced it will hold a major inquiry into artificial intelligence (AI) and policies regulating the emerging technology.

South Australian Premier Peter Malinauskas said that a royal commission into AI will begin in October and deliver a final report by July 2027, focusing on the economic and social opportunities presented by AI as well as policy and regulatory settings.

He told reporters that the nation-leading inquiry will give South Australia an opportunity to shape how AI is used, warning that it represents a "material risk" to the way society operates and to the future of work if it is left unchecked.

He said on Monday that the full terms of reference for the inquiry will be announced and three commissioners appointed within six weeks.