Australia’s emergence as a global data centre destination

Over the past year, Australia has rapidly become a global data centre investment destination. In the last three months, we have seen landmark announcements from Amazon Web Services (AWS), Telstra, and NextDC, each signalling a profound shift in how global tech giants view Australia’s role in the digital economy.

AWS’s $20 billion infrastructure expansion, Telstra’s strategic review of its $200 million data centre portfolio, and NextDC’s sovereign AI hub in Melbourne are not isolated moves. They reflect a broader trend: Australia is becoming a preferred location for hyperscale data centres, cloud infrastructure, and artificial intelligence (AI) innovation.

This surge in investment is not just about capacity. It’s about capability, resilience, and strategic positioning. For technology, media and telecommunications (TMT) businesses, understanding the forces driving this momentum is essential to navigating the next phase of digital transformation.

What’s driving global investment in Australian data centres?

We’ve identified five key drivers underpinning the growth of data centre investment:

1. AI acceleration and compute demand

Australia’s appetite for AI is growing rapidly. From generative AI in media to predictive analytics in healthcare, the demand for high-performance computing is surging. Data centres are the only infrastructure capable of supporting these workloads at scale.

Global players are responding. AWS’s investment includes not just physical infrastructure but also AI training programs and access to Nvidia’s cutting-edge chips - positioning Australia as a regional leader in AI capability.

2. Strategic geography and connectivity

Australia’s geographic location offers a unique advantage. As a stable, English-speaking nation with strong ties to Asia, it serves as a regional hub for cloud services and data routing. Submarine cable networks connecting Australia to Southeast Asia and the US further enhance its appeal.

This connectivity is particularly attractive to rapidly scaling tech companies looking to serve both domestic and regional markets from a single, secure base.

3. Regulatory stability and data sovereignty

Australia’s regulatory environment is transparent, predictable, and increasingly aligned with global data governance standards. The Security of Critical Infrastructure Act has elevated data centres to the status of essential infrastructure, reinforcing investor confidence. Furthermore, Australia’s data sovereignty laws require sensitive data especially in finance, healthcare, and government to be stored locally. This creates a built-in demand for domestic data centre capacity and ensures long-term relevance.

4. Sustainability and energy innovation

Global tech firms are under pressure to meet ambitious sustainability targets. Australia’s renewable energy potential, particularly in solar and wind makes it an attractive location for green data centres.

AWS’s recent commitment to build three solar farms in Victoria and Queensland to power its new facilities is a prime example. These projects will deliver over 170 megawatts of clean energy, aligning infrastructure growth with ESG goals.

5. Talent and innovation ecosystems

Australia’s universities, research institutions, and tech startups are contributing to a vibrant innovation ecosystem. Melbourne’s Fishermans Bend precinct, home to NextDC’s $2 billion M4 data centre, is being positioned as a sovereign AI infrastructure hub, a fully integrated and self-contained hub, combining speed, scale, and security. This convergence of infrastructure and innovation is drawing global attention and capital.

How BDO can help

Australia is no longer just a consumer of global technology, it’s becoming a builder of it. The influx of global investment into data centres is a signal to TMT businesses: the infrastructure is here, the opportunity is now.

Whether you are exploring partnerships, expanding your cloud capabilities, or navigating regulatory and ESG considerations, BDO’s technology, media and telecommunications specialists can help you make informed, strategic decisions. Contact our team today.