How many data centres will we end up with? - ABC News & Headlines – Australian Broadcasting Corporation

A plan for a data centre metres from homes and a school in Lane Cove has been shelved after residents of the Sydney suburb fought back and won.  

But it’s just one proposal among many, as demand for AI drives a boom in data centre construction across Australia.  

Today, we hear from a Lane Cove resident, and ask the ABC’s national AI reporter Cam Wilson just how many data centres we could end up with.

Sam Hawley: In a lower North Shore Sydney suburb, residents came out fighting and they won. A plan for a data centre metres from local homes and a school in Lane Cove was shelved. But there are so many more in the pipeline. Today we talk to a Lane Cove resident and ask the ABC's national AI reporter, Cam Wilson, just how many data centres we could end up with. I'm Sam Hawley on Gadigal land in Sydney. This is ABC News Daily. 

Sasha Titchkosky : Hi, I'm Sasha Titchkosky and I am a spokesperson for a community-led group called Lane Cove Responsible Planning who have been fighting the establishment of a data centre cluster in their community.

Sam Hawley: And Sasha, you actually have had a big win, haven't you? Just tell me about that.

Sasha Titchkosky : Yeah, we have managed to stop a $1.2 billion data centre from being built right alongside the established residential area in our community.

News report: Some rarer news this morning. A controversial development facing fierce opposition has been canned. Developer Goodman Group have confirmed it will no longer proceed with a $1.2 billion project centre.

News report: The company behind this scrapped project cited changing regulations, together with feedback received through the planning process, including the views of the local community.

Sasha Titchkosky : So it's been a massive win for a very small community group.

Sam Hawley: Yeah,sure has. And tell me, why were you so determined to stop it?

Sasha Titchkosky : It sat alongside an established residential area, heavily utilised playing fields, conservation zone bushland, the Lane Cove River and opposite the Lane Cove National Park. And this particular proposal was only 20 metres from the closest house. So a really inappropriate location for a hyper-scale data centre.

Sam Hawley: And it was really close to a school as well.

Sasha Titchkosky : It was, yeah. So it's only 160 metres from the local public school and then a similar distance from a childcare centre. We already have one hyper-scale data centre in the neighbourhood. So AirTrunk has a facility there. And you can do a beautiful walk along the river, or in my case, I'm often rowing on the river, and you can hear the data centre very clearly before you can see it. So that was a real concern to the community. There's also the heat impacts that data centres generate, and that all ends up dissipating into the atmosphere. Then there was also the issue of the potential fire risk. This particular data centre would have stored a million litres of diesel fuel and 198,000 kilograms of lithium batteries. And then there's also the issues of light spills. So the data centres use lighting to light up their perimeter all through the night for security reasons. So that was a real concern.

Sam Hawley: Alright. Well, Sasha, this is an issue, of course, that's also playing out across the United States. Donald Trump has said that the only reason communities in the US should not want data centres is if they want to end up backwards and poor. What do you make of that? Because they're lucrative, that's for sure.

Sasha Titchkosky : They're lucrative, but if you do a little bit of digging behind kind of the numbers, it's very interesting. So, you know, understandably, the federal treasurer and the state treasurers are looking for opportunities to boost GDP. But that's all actually coming, almost all, from data centre construction. The issue with that is that it's driving up construction costs, which is having an inflationary impact in the economy. So then it means that everyone with a mortgage or who's renting from someone who has a mortgage, it'll all be costing us something as well. And I think that's sort of a real concern. And then there's sort of the issue of how we actually derive benefit from these data centres and from AI as an economy beyond the construction phase. And I don't think anyone's actually quite worked that out yet. We don't want to end up in another situation like we have with the gas industry where we, you know, incur all of the costs in relation to the establishment of the industry and then we don't really see any benefit from it. And I think that we could be in a situation where we sort of allow unfettered data centre development across Australia without really thinking about, you know, how do we make sure there's compute that's reserved for Australians and for Australian industry, research bodies? How do we know what's actually being done in those data centres? Do we want them? You know, are we happy for them to be used in relation to warfare or, you know, I think these are all legitimate questions that we should be asking and that our politicians should be asking on our behalf as well.

Sam Hawley: And what would be your message to other communities who may just be realising that data centres are being built near them?

Sasha Titchkosky : I think really start to engage with the developers. So I think getting communities really involved in that early engagement. And I think there's a lot of opportunity to share knowledge and experiences to help each other out. But it does really require, like, for a group of us, it's almost been like having a full time job working on this. You really need a few committed people who have the time to sort of put into driving a campaign like this.

Sam Hawley: Cam Wilson, you're the ABC's AI reporter. So let's delve into data centres. At a CommBank AI conference earlier this year, OpenAI's CEO, Sam Altman, he said Australia could become a data centre capital of the world.

Sam Altman, OpenAI CEO: Australia has among the best natural resources and abundant clean energy stores in the world. And if Australia wanted to become a data centre capital of the world, it would certainly be able to. In fact, I think it'd be in the very top few places in the world in terms of what's possible there.

Sam Hawley: What did you make of that when he said it?

Cam Wilson: It's a view that you are hearing from parts of business and government as well. This idea that Australia has an opportunity that we are particularly well suited and placed to potentially become a country that could do a lot of the work of being the kind of infrastructure for AI, both in Australia and the rest of the world.

Sam Hawley: And so how many do we actually have at this point? Bearing in mind, I think we should mention, so we've got a bit of a comparison, there are more than 4,000 in the United States, a much bigger country, of course. But what are we looking at here?

Cam Wilson: In Australia, one widely used figure from earlier in the year is that we have about 160 data centres around Australia. And at the time, we had a pipeline of about 100. I think that's actually, both of those numbers have increased since then. And I think it's probably worth keeping in perspective, compared as well to the US, it's not just the number of data centres that we have, but the size of them. And by that I mean both literally, but also in terms of their computing capacity, that's what they're doing, their grunt, and as well as their consumption, how much energy they're using. We do pale in comparison to the US at the moment. And even as we have this new generation in this pipeline of data centres that are bigger, more power hungry than the ones before it, they still aren't quite as big as the biggest ones being proposed in the US. So we still are kind of the little brother or sister in that regard.

Sam Hawley: Just tell me though, what do we know about what's been going on behind the scenes? Because it's not like as Australians we were asked, do you want to be a data centre hub for the world? We didn't even know really, most of us, that these data centres were being built.

Cam Wilson: Yes I think the moment that really kind of made it abundantly clear where Australia, or at least the government, was heading or wanting to head was that speech made by the Prime Minister in July this year. It was called I think AI in Australia's Interests.

Anthony Albanese, Prime Minister: Our government will establish a set of Australian standards for AI. In March this year we announced a set of expectations for large AI data centres. This will bring them into one regulatory framework. Clear, consistent and mandatory.

Cam Wilson: But the other part of it is at the same time as the government and Anthony Albanese was, you know, kind of getting out the rule book, they were also rolling out the red carpet as well. They were saying, and very explicitly, particularly in kind of comments since then, we want foreign investment from these major AI companies. And that is primarily through the building of these data centres here. These are the things that they use to both serve the products, so you mean to actually run them, kind of upkeep, and every time you send a chat prompt to ChatGPT or Claude or Gemini or your AI chatbot of choice. But also the ones that we're really after are these ones that are the training ones. Training is only really done in the US by US companies and in China by Chinese companies. Nowhere else. Australia is making this pitch saying, actually, why don't you make Australia the first place that you're doing training outside of the country that you're in, set up these massive infrastructure that you need to do it, and hopefully bring along some of the people and knowledge and stuff that it takes to run it, so Australia can be enriched from that as well.

Sam Hawley: Wow. And this is all about investment and economic growth, of course. And Australian data centre operators have raised $35 billion, $35 billion this year alone. So it is and can be an absolutely massive industry. Is this, Cam, our new mining boom?

Cam Wilson: Yeah. I mean, look, if you looked at the economic figures, I think, from the last quarter, the thing that was holding up Australia's economic growth almost entirely was data centre construction. So it is literally right now the thing that is kind of keeping the Australian economy growing at the moment. Some analysts are putting the dollar amount being invested into this pipeline of building out these data centres at more than $150 billion. So there's a lot of money going into it. That being said, it's worth kind of looking at these numbers kind of a bit in context, because when you're talking about productivity, economic growth, when you're looking at what they're doing, which is mostly, again, building these data centres, it's not quite as clear cut as it might seem at first. Because the first thing is that the people building data centres generally are not the massive tech companies. But a lot of the money is going into the computer chips, the computer parts that are inside it to actually run all the AI and other things that run on it. And most of those components, those computer chips, are produced outside of Australia. That money is kind of going straight out of the economy. So that kind of gets this really interesting part with how do you actually understand what is the real benefit to Australia? Just looking at the top line figure doesn't give you the whole story on that.

Sam Hawley: So we've already got quite a few data centres, but tell me, Cam, what exactly is the limit? How many data centres can we actually host? Could we reach into the thousands?

Cam Wilson: That's a great question. I mean, it depends on a whole lot of things. The data centres get bigger, you need kind of fewer of them. But in terms of how many that we will allow, in some regards, Australia is kind of well set up to build these. Because we have a rare combination of country that has a skilled workforce that can build them. We have a good electricity grid with a lot of renewables. And yes, we've got things like gas firming as well to kind of back it up if necessary. We're in Five Eyes. We're politically stable. Even when we're not on fault lines for earthquakes. There's nothing to really suggest that there are major natural disasters that would threaten this infrastructure. So that's why these major AI companies are very interested in potentially building in Australia. Because of those things, that means that we have a bit of leverage. So in terms of how many can we have here, I mean, we've got a lot of land. The question is, how many are we willing to build? What do we have to kind of get for local communities to feel good about it, for state and federal governments to feel good about it? I think the ceiling is very high. The question is, where are we actually going to set our own personal limit? Because it seems like depending on whatever cost we set for these companies, they will kind of take as much as we can give at the moment.

Sam Hawley: Cam Wilson is the ABC's national AI reporter. We also spoke to Sasha Titchkosky, a resident of Lane Cove in Sydney's Lower North Shore. This episode was produced Ilaria Brophy and Louise Miolin. Audio production by Sam Dunn. Our supervising producer is Sydney Pead. I'm Sam Hawley. Thanks for listening.