The National Reconstruction Fund Corporation (NRFC) has expressed confidence in its $32 million investment in the Australian AI healthcare firm, harrison.ai, despite growing controversy surrounding the company’s handling of sensitive patient data. However, the NRFC has yet to clarify whether it took into account an ongoing privacy investigation involving the company’s acquisition of hundreds of thousands of chest X-rays from Australian patients.
During a Senate estimates session on Thursday, NRFC officials faced scrutiny regarding the decision to back harrison.ai, which has come under fire following revelations that it used patient data to train its AI algorithms without consent. The investment, made in late January, was part of harrison.ai’s latest $170 million fundraising round, which included significant backing from multiple stakeholders, including the pathology giant I-MED.
The controversy stems from investigations by Crikey, which uncovered that harrison.ai had accessed patient X-rays from both private and public healthcare systems, including scans taken in emergency rooms where patients could not provide consent. The data was shared by I-MED, which also holds a stake in harrison.ai, raising questions about the ethics of the data collection process. As a result, the Office of the Australian Information Commissioner (OAIC) initiated an inquiry into I-MED’s role in the matter.
While harrison.ai has defended its actions, asserting compliance with Australian privacy laws, the NRFC faced pointed questions from Greens Senator David Shoebridge about its due diligence procedures before making the investment.
Dr. Mary Manning, the NRFC’s Chief Investment Officer, confirmed that the corporation had considered environmental, social, and governance (ESG) factors, including data privacy concerns, prior to committing to the deal. Despite this, Manning declined to confirm whether the NRFC’s board was aware of the privacy investigation into I-MED at the time the investment was approved.
The timing of the investment raised further questions, as it occurred shortly before Manning’s comments in Senate estimates and just a day before the appointment of NRFC CEO David Gall. Gall stated that he was unaware of the privacy probe when the decision was made and indicated that the NRFC would “review” the investment in light of new information. Gall also emphasized that the corporation would continue to oversee its investments.
The NRFC’s involvement in the deal has raised concerns, particularly as the government-owned fund is tasked with using taxpayer money to back innovative Australian businesses. Minister for Industry and Science Ed Husic had previously heralded the investment as a prime example of Australian ingenuity, calling it a step toward fostering global leaders in AI and technology.
As the privacy probe into I-MED continues, questions remain about the adequacy of the NRFC’s vetting processes, and whether the board was fully aware of the ethical and legal challenges facing harrison.ai.
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