Last updated: 09th Sep 2026
We are in a civilisational moment. The Australian AI data centre pipeline is estimated at over 150 billion, with projected capacity of 16.2 Gigawatts – or 13 times the current levels. There are already 296 of them here, mostly clustered around Sydney and Melbourne.
But there’s no shortage of controversy and conflict.
Community’s revolt against data centres is unusually bipartisan, and the Australian Labor government is figuring out how to stay elected – while keeping Australia relevant on the global stage.
A Senate inquiry is examining the effects of AI data centres on energy systems and water resources. In NSW, a parliamentary inquiry is doing the same – plus examining the effects of AI on urban planning.
Finally, the Department of Home Affairs is rolling out stricter requirements for high-risk critical infrastructure. Predictably, this includes AI data centres, power networks and water reserves.
Why Is Australia In Such A Rush To Build AI Data Centres?
The centres, along with the physical infrastructure that powers them, are significant national assets – and form vital components of Australia’s energy and national security strategy.
We’re laying down infrastructure of the next industrial revolution.
It’s helpful to view data centres as a vital layer in what NVIDIA CEO Jensen Huang calls a “5-layer cake”:
- Energy. Every country in the AI race must contend with increased power needs.
- Chips. GPUs capable of parallel processing are used to create AI tokens.
- Infrastructure. Data centres, AI factories and their vendors.
- AI Models. Where most people assume AI “lives”
- Applications. Where end users convert AI tokens into productivity gains while capturing the economic upside.
What Is The Backlash Against AI Data Centres?
Resistance to technology is not a new phenomenon. Hysteria from both sides of the political spectrum was always predictable.
During the so-called “War Of The Currents“, with Thomas Edison on one side and George Westinghouse on the other, regular people were often caught up in fear-mongering tactics of a wider ideological conflict.
Above: Anti-electricity propaganda cartoon from 1889. Entitled “The Unrestrained Demon”, it referred to the dangers of AC current.
Of course today, we use AC current everywhere, after we’ve learned how to make it remarkably safe.
But the same pattern is playing out today in Australia with AI data centres.
Much of what you heard about data centres is oversimplified nonsense, designed for easy consumption online.
Important!
Everyone is in danger of viewing data centres through the lens of their pet political issue.
For the far-left activists, data centres are yet another symbol of a capitalist apparatus that oppresses minorities through a white-supremacy system.
When they’re not protesting against Israel or sloganeering about social justice for a minority trampled by colonial powers, they are busy subverting the “ruling order” and “unmasking” the tyrannical nature of Western culture.
On the less extreme left, the usual suspects like the ABC and their bleeding-heart woke audiences are indulging in predictable virtue-signalling tropes.
These folks view themselves as cultural vigilantes, defending the little guy against depredations of “corrupt” elites like Elon Musk. This is grievance politics at its best – aimed at capturing the easy moral high ground.
They view any resistance to data centre construction as a Chinese psyop designed to throw sand in the wheels of Western progress, thereby ensuring Chinese AI supremacy.
For them, anyone opposing data centre construction is a useful idiot for the CCCP.
Important!
A tech race needs a worthy adversary. The competition between USSR and USA helped fuel innovation during the Cold War. The same is happening right now between USA and China. Great power competition.
On the far right, the focus is, as always, on “unplugging” from the Matrix.
These guys, with collective IQ safely in the double digits, are garden-variety fruit loops, living in the sweet spot of Holocaust deniers meet methheads.
Fearing an Orwellian AI surveillance state, they have “awakened” to the fact that a secret satanic cabal of Jewish lizard Illuminati is controlling society from the shadows, and the Rothschilds are funding every AI data centre in Australia.
Why Power Is The #1 Issue With AI Data Centres.
One of the most common critiques of AI data centres in Australia is that their rapid growth will strain the grid and drive up the price of electricity.
There is some truth to this – but it’s nuanced.
A hyperscaler like Google or Amazon, or an AI factory like Firmus, can build a data centre far faster than the rest of the private sector can provide power generation and connections needed to power it.
This mismatch drives the price pressure – and worries activist types.
Did You Know?
Data centres will require 25% more power per year until 2030. This will add pressure on Australian power grids, which rely on fossil fuels for about 64% of their electricity output.
All state governments agree that Australia must not plug an industrial load of this scale into the existing power grid – and let small businesses and households absorb the cost.
We must match any additional demand with sufficient levels of supply.
The National Cabinet convened at the start of September 2026 to decide on a strategy for removing this bottleneck.
Queensland and the Northern Territory refused to accept a national standard that requires them to bring their own “100% renewable energy” – plus firming through battery storage or gas.
Energy Minister Chris Bowen promised there would be no carve-outs or exceptions, except with a few scenarios where existing coal and gas generation was demonstrately cheaper than renewables.
The government is due to present its working paper at the end of 2026, and roll out legislation in 2027.
Where Are The Australian AI Data Centres Located?
Raelene Lockhorst from the Australian Strategic Policy Institute has argued – convincingly – that we must build the bulk of our AI data centres in the Northern Territory.
This is an interesting proposition – because it would leverage NT’s vast space, energy resources and proximity to Asia-Pacific markets. It also sits outside the National Electricity Market (NEM) and has Beetaloo gas coming online.
Important!
It’s also a stark departure from the current strategy, with 91.3% of Australia’s planned data centre capacity to be built in NSW and Victoria.
It also offers relief from rising real estate prices.
Commercial real estate prices have soared, with data centre providers paying premiums in NSW and Victoria.
Amplifying this rise is the need for vendors that supply components to data centres to lease industrial sites nearby.
According to JLL, these companies alone have leased more than 100,000 square metres of warehouse space in the past 12 months.
Did You Know?
A 20,000 square metre warehouse in Sydney’s Outer Central West could cost 88 percent more to rent in 2027. Renting a similar warehouse in Melbourne could cost 132 percent more, according to JLL’s modelling.
Why Are AI Data Centres Not Being Built In Low-Regulation Countries?
Sovereign AI. Sensitive data. Strategic asset.
How Do We Power AI Data Centres?
Where do we get enough energy to reliably run these data centres?
Repurposed aircraft engines. The problem is heat. Designed to operate at cold temperatures of the atmosphere, these engines would melt if ran at sea level.
The only way to make it work is to throttle them back and spray water into them from the front. This is obviously suboptimal if the data centre is built in an area where water is already scarce.
Even jet engines that generate 42MW of electicity were proposed as an alternative.
Designed to operate at higher temperatures, these don’t require water cooling. These run on natural gas.
Can We Move AI Data Centres Into Orbit?
Space-based data centres could untether us from the energy grid. A way to bypass resistance from the community and activist groups.
They consume power from solar arrays rather than land-based power grids. They’d obtain power from space, and vent heat in space. The only thing that would come back to Earth is data.
Economics are – predictaby – brutal. SpaceX is the leader here and it currently costs the company $2,900 to launch a kilo of payload to space. It needs to come down to about $500 to make the exercise commercially viable.
Latency isn’t an issue because satellite will stay in geostationary orbit
Can We Put AI Data Centres Offshore?
Possibly. Atomic company is a Y Combinator startup suggesting we put data centres into the ocean, powering them with nuclear energy.
Steven
Saranne Segal says:
Great article on handling workplace conflict! One factor I think should deepen the discussion further is the role of cultural differences within workplace conflicts. Many times what seems like a value conflict may actually turn out to be a cultural misunderstanding, especially in very diverse teams. Acknowledging and respecting these cultural nuances can really mean the difference between resolution and disputes and establishing an inclusive environment.
Additionally, it may help to mention the value of psychological safety. When employees feel they can speak up without repercussion, that alone can end low-level conflicts and foster more open channels of communication. This, of course, fits right in with your notes of how respect and empathy are key parts of conflict management. Thanks for illuminating an important topic and sharing your insight.
Steven McConnell says:
Thanks Saranne, you make valid points.
George Porter says:
I especially appreciated how the article links self-regulation directly to team performance—it’s rare to see that connection spelled out so clearly. Having seen teams struggle with miscommunication during high-stakes projects, I’ve noticed that leaders who pause before reacting often de-escalate tension before it impacts output. That practical cause-and-effect really resonates with what I’ve observed in real work settings.