Q+A: Why Australia is becoming a data centre powerhouse
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What is driving the boom of data centres in Australia?
Welcome to Fear and Greed Q&A, where we ask and answer questions about business, investing, economics, politics, and more. I'm Sean Aylmer. Data centres are booming in Australia as infrastructure races to keep up with the demand for AI technology, cloud computing, and the like. As a nation, we're punching above our weight in this space and are rapidly becoming a regional hub, attracting investment from around the world. Today's episode is part of a series recorded here at the Microsoft AI Tour in Sydney, and exploring how businesses and organisations can drive real change with the latest AI technology. Belinda Dennett is the Chief Executive Officer and Co-Founder of Data Centres Australia, the peak body representing Australia's data centre and AI infrastructure sector.
Belinda, welcome to Fear and Greed.
Thank you very much.
As I said, we're at the Microsoft AI Tour Sydney.
How significant is Microsoft's $25 billion investment in Australia?
We just heard about a $25 billion investment from Microsoft. That's the sort of news you must love.
It's incredible. It's really a vote of confidence in Australia as a data centre investment destination. And it really tops off what has been a phenomenal week in Australia. We've seen record announcements, others investing in renewable energy projects, capital raising, IPOs happening. It really has been quite a phenomenal moment in time.
Yes. I mean, if you think, say, Next DC raised a huge amount of money, a couple of the big tech giants now have promised to put money into it. Data centres, where are we up to in Australia in that whole evolution of data centres?
What challenges do data centres face regarding energy access?
We have some of the best practice global leading data centers in Australia here, home founded companies. You just mentioned NextDC, CDC, AirTrunk. They're globally renowned as being best in the business. What we should recognize here in Australia is that our size is actually pretty modest in terms of, we talk about data centers in megawatts as capacity. And we have in Australia 1.5 gigawatts of capacity nationally. And if you compare that to the US, that currently has around 54 gigawatts of capacity. So it's quite small. It means there's room for growth and it is growing, but it's not at that pace that we're seeing in the US where a lot of the headlines are coming and people are getting alarmed about
energy use and water use and the likes.
Okay, so let's talk about energy and you mentioned it there, you alluded to it there. So, you know, most property we think of in square feet, square metres, not when it comes to data centre land because the biggest constraint is energy. So it's actually about how much energy we can get and that's how we measure data centres. How big a problem is energy and getting access to energy for data centres?
So the challenge is that we are going through an energy transition right now. We're transitioning from fossil fuels to renewables. This was always gonna be a transition period and it was always gonna be a bit messy, but we're bumping up against this growth in demand for digital. And so data centers don't use energy just to be data centers. They aggregate the energy across the digital economy. All these AI services, tech services, cloud services that we're all using in greater number, That's what's driving the demand for data centre capacity.
How is Australia transitioning to renewable energy for data centres?
That's why we need more energy than we've needed in the economy. And then we're going through this transition. So that means it's going to be a little bit bumpy and a little bit messy.
But ultimately, so it might be bumpy for a few years, but ultimately, once we transition and assuming Australia can work its way through the solar, wind revolution, hydrate revolution, there will be enough energy for, and as you rightly point out, it's not just data centres, it's technology.
So one of the things that makes Australia such a compelling market for investment is because of our abundance of renewable energy. We've got space, we've got sun, we've got wind. The challenge right now is not generation, it's transmission. So where we produce that renewable energy is in renewable energy zones, a long way from where we're using the energy, which is in cities and the urban fringe.
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Chapters
6 chapters
1
What is driving the boom of data centres in Australia?
0:05–0:54
2
How significant is Microsoft's $25 billion investment in Australia?
0:54–1:40
3
What challenges do data centres face regarding energy access?
1:40–3:30
4
How is Australia transitioning to renewable energy for data centres?
3:30–6:54
5
What role do data centres play in the energy transition?
6:54–10:19
6
How does water usage in data centres compare to other industries?
10:19–11:47
Speakers
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