US Tech Firms Eye Australia for AI Centers, Local Operator Says

US tech titans are interested in building data centers in Australia, drawn by its green grid and proximity to Asia, as they face a growing backlash at home, according to AirTrunk Operating Pty Ltd.

The data-center operator has seen stronger-than-expected interest in Australia over the past six to eight months from companies including Google LLC, Apple Inc., Meta Platforms Inc., Amazon.com Inc. and Microsoft Corp., said Sabooh Whitelaw, associate vice president for energy and utilities at the Sydney-based company.

“Australia has political stability, access to renewable power, available land” and is close to major population centers in Asia, she said in an interview. “The demand is expected to translate into firm commitments and investment in the coming months and years.”

Google, Apple, Meta, Amazon and Microsoft didn’t immediately respond to requests for comment.

The artificial-intelligence boom in the US is colliding with a shortage of available power in established data-center markets, while concerns about the impact on household electricity bills and the environment are fueling a growing political backlash. Worries about grid and water use have seen projects from New York to Seattle temporarily halted.

Australia, meanwhile, is betting the data-center boom — which Commonwealth Bank of Australia estimates could attract A$150 billion ($108 billion) of investment by 2030 — will help fund new renewable electricity as aging coal plants are retired. Canberra is planning national standards that could require large data centers to underwrite their own generation.

The AI centers are forecast to account for 13% of Australia’s total electricity use by 2035-36, from 3% now, according to the Australian Energy Market Operator. There’s a risk that power demand from data centers will outpace the building of new energy infrastructure.

Australia has so far avoided the scale of backlash seen in the US, although opposition is emerging. Activists have called for an urgent halt to the expansion of data centres in New South Wales, while a Tasmanian petition seeking a moratorium drew more than 10,000 signatures and prompted a parliamentary inquiry.

About 84% of the nine gigawatts of proposed data-center capacity seeking transmission connections on Australia’s main grid was still at the application stage in the June quarter, and none had reached commissioning, according to the Australian Energy Market Operator.

Delays in grid connections and approvals risk pushing back Australian projects as demand outpaces construction, AirTrunk’s Whitelaw said.

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