In an address to an Australian Strategic Policy Institute conference in Canberra on Thursday evening, General Campbell said disinformation was being used as a "weapon of statecraft" at a time of soaring competition between great powers.
"This tech future may accelerate truth decay," he said.
"Greatly challenging the quality of what we call public common sense, seriously damaging public confidence in elected officials and undermining trust that binds us.
"We rightly pride ourselves on being an open, diverse and liberal society. In other words, exposed."
General Campbell said the emergence of AI deepfakes were impacting people's ability to perceive reality, and when they were created of nation's leaders, posed a serious risk.
He said there may "come a time when it is impossible for the average person to distinguish fact from fiction".
Australia would need to build and encourage critical thinking among its citizens to combat disinformation, General Campbell added.
The military leader said countries had strategies to win without fighting, and pointed to China's use of the approach.
"There is no denying that the most developed doctrinal approaches that seek to win without fighting are observed in non-western institutions, particularly the People's Liberation Army," he said.
General Campbell said their three warfare strategy included psychological, media and legal operations.
He reaffirmed "conflict in our region would be catastrophic for all".
Asked about the AUKUS security pact, General Campbell insisted Australia would retain decision making.
He said the military will "build seamless interoperability so that - subject to a sovereign decision - we can work together in a way that presents the expression of our collective multinational intent".
On climate fuelled disasters, General Campbell warned of the food and water security implications, in addition to waves of migration.
"This disruption is happening faster, and less predictably than we all hoped," he said.
"Without the global momentum needed, we may all be humbled by a planet made angry by our collective neglect."
