US software giant Microsoft is to help Australia develop a cyber shield to help defend itself against global online threats, Australian Prime Minister Anthony Albanese has announced.

Albanese and Microsoft president Brad Smith unveiled the plan at the Australian embassy in Washington, DC on the first day of the PM’s official visit to the US.

Microsoft says the project is part of its biggest investment in Australia in its 40-year history: a $5 billion plan to expand infrastructure and skills, with a focus on cloud technology and artificial intelligence.

The company will work with the Australian Signals Directorate — the national agency responsible for cybersecurity and online warfare — to build the cyber shield, dubbed MACS (Microsoft-Australian Signals Directorate Cyber Shield). 

Without naming specific countries, Microsoft said it would have a focus on “defending against sophisticated nation-state cyber threats”.

Asked about the plan being aimed at countering the threat of China, Mr Albanese said it was “aimed at strengthening Australia”.

He said it was one of the first steps in the Australian Cyber Security Strategy, announced after last year’s Optus and Medibank cyber-attacks,  aimed at making Australia “the world’s most cyber-secure nation” by 2030.

“We know, because we’ve seen through the examples in Australia, the impact that a cyber attack can have,” Albanese said.

“This will increase Australia’s capacity to resist such attacks, but also to identify potential weaknesses.”