The sophisticated search abilities of "quicker, easier, nastier" systems were a key national security risk, Home Affairs deputy secretary Ciara Spencer told an inquiry on Friday.
"They scroll all your parliamentary speeches, your social media profiles, everything about you, so they can find a really targeted way to engage with you and make it more likely that you will engage back," Ms Spencer said.
"We've seen a couple of AI companies come out quite publicly and say they've been able to track a certain number of inauthentic communications coming from particular state actors."
The nation's top spy chief agrees that foreign powers are active at a broader level across Australia's online space.
ASIO chief Mike Burgess identified China as the nation's top hacking threat, with its understanding of the domestic telecommunications network now so sophisticated, it could "turn them off, should they need to".
"They are working actively to understand our systems," ASIO chief Mike Burgess told the Mitchell Unlimited podcast.
"I believe in some cases they could do it today," he said.
Mr Burgess urged calm among Australians, as it was unlikely our communications systems would be turned off unless we were at war.
But he warned people should not have highly sensitive conversations in their cars or near their phones, given foreign governments' ability to listen in.
"China is the principal concern for Australia," he said.
"China are preparing for this. But again, they're not going to do it any time soon.
"Anything connected means it could be exploited by those who want to listen to what you're saying or observe where you've travelled in that car. So that's a vulnerability that we have today."
The podcast echoed comments Mr Burgess made 10 months ago, telling a Melbourne business forum Australia was at the threshold for "high-impact sabotage".
At the time, he cited Chinese hacking groups Salt Typhoon and Volt Typhoon, which have targeted telecommunications networks in Australia and the United States.
He also reiterated a warning on the podcast that Australia's Jewish community faced threats from foreign state actors, particularly Iran.
"(There is) no immediate threat that we're investigating, but we do have that concern, and it's not because of Australia. It's because of their (Iran) hatred of Jews," Mr Burgess said.
"I wouldn't rule out the possibility that Iran would want to kill prominent Jewish Australians," he said.
The state of Israel and the views of Jewish people had been conflated in public rhetoric, Mr Burgess said, leading to greater security concerns within Australia.
ASIO has long warned Australians could be killed on home soil by a foreign actor - something Mr Burgess had "not changed" his view on.
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