Resources:Data Centre FAQ

What is a data centre?

A data centre is a giant warehouse that is purpose-built to house the computer servers, networking equipment and other hardware that power many of the online services we use today. Data centres have evolved considerably over time. During the dot com bubble (1997-2000), many companies built and operated their own small-scale data centres that contained their own IT equipment [1]. This model was disrupted by the advent of cloud computing in the early 2000s, where technology giants such as Microsoft, Amazon and Google began renting out their own servers for computing and storage [2]. As cloud computing was seen to be a cheaper and more reliable alternative to "on-premises", many companies began migrating their data to these third-party data centres. Tech giants quickly dominated the cloud computing market and began constructing a new generation of "hyperscale" data centres. These facilities usually exceed 1,000 square metres in size and require 40-100+ megawatts (MW) to power more than 5,000 servers [3].

What is driving global data centre development in 2026?

The number of hyperscale data centres has ballooned since Google announced the construction of its first in 2006 [4], reaching 1,360 globally at the end of the fourth quarter of 2025 and accounting for 48% of the worldwide capacity of all data centres [5]. The explosion in data centre development is being driven primarily by the training and use of AI models such as Claude and ChatGPT. AI workloads represented 25% of data centre workloads in 2025, and is projected to grow to 50% by 2030 [6]. Hundreds of billions of dollars are being spent by the largest hyperscaler companies (Amazon, Google, Meta, Microsoft) to sustain the compute requirements of AI, and, in 2026, we are starting to see the emergence of gigawatt (GW) facilities [7].

What is driving data centre development in Australia?

Australia is second only to the US as a top data centre investment destination due to our "secure energy grid, robust regulatory framework, and stable political environment" [8]. From a policy perspective, the Australian Government released the "National AI Plan" in December 2025, which detailed a commitment to "establish the right settings to attract domestic and global investment" in order to "build an AI-enabled economy". This commitment evolved in July 2026, as Prime Minister Albanese announced the creation of The Office of AI, which is designed to deliver "greater clarity and speed for approvals" for international investment [9]. States and territories have and will continue to follow suit, offering light-touch regulations, fast-tracked building permits, and readily-available land and resources to win investors over. In Victoria, the Development Facilitation Program (DFP) allows for data centre permit applications to be made to the Minister for Planning directly, bypassing local councils. New South Wales has a similar scheme in the Investment Delivery Authority (IDA).

How many data centres are there in Australia?

As of mid-2026, there are 162 data centres in operation across Australia. An additional 90 are in the pipeline, 74 of which are to be built in Victoria and New South Wales [10]. For more information on planned, under construction and operating data centres in Australia, see the crowd-sourced Data_Centre_Tracker hosted and maintained on this wiki.

Will data centres create jobs?

Outside of short-term construction demand, data centres are largely automated and can be run with relatively few staff. Recent reporting sets the number of workers directly employed in the data centre industry at 11,500 nationally [11]. Examination of the planning documents for a $422 million, 20 hectare data centre in Truganina reveals that job creation after construction will be limited to "approximately 48 staff members and 12 off-peak skeleton staff to maintain security and operations" [12]. That's about $70 million spent per job created. On top of that, the technology required to fit out data centres must be imported, and Australian tech firms have laid off 4,450 workers so far this year [13].

What are the energy requirements for data centres?

Data centres need an enormous and constant supply of energy to function. They alone were responsible for 50% of total demand growth in Australia in 2025 and are on track to consume 8–11 per cent of Australia's total energy by 2035 [14]. This demand is sourced from the same network that we all rely on, and the providers are not prepared for the impending surge. Jemena expects an increase of 3.2 gigawatts, which is enough electricity to power millions of homes, and ordinary people are expected to foot the bill for expensive upgrades through wholesale electricity price hikes [15].

Wholesale price hikes are only worsened by data centres keeping the grid hooked on expensive fossil fuels as the capacity provided by renewable projects immediately goes to supporting their energy demands. This results in an increased reliance on gas projects, with EnergyAustralia recently announcing its plan to build two new gas power stations to keep up with data centre demand [16]. If additional renewable projects are not added to keep up with this demand, wholesale prices could increase by 23% by 2025 [17].

What are the water requirements for data centres?

Hyperscale data centres directly use huge amounts of water to the cool high-powered servers that run 24 hours a day, 7 days a week. As of mid-2026, there are no efficiency standards for their use of water in Australia, and the requests being put to suppliers are enormous [18]. In 2025, Greater Western Water, which services Melbourne's north and west, reviewed 19 applications from data centres for water usage, with the requests totalling 19,714 megalitres (ML) of drinking water each year. These requests come as Melbourne Water has stated that the city's water storages are not being replenished fast enough to sustain a growing population [19]. In Sydney, future water usage estimates range from about 1.9% of water supply by 2030, to around 15–20% by 2035 [20]. The data centre industry points to water-saving innovations for equipment, such as closed-loop cooling systems, but the debate tends to be confined to the direct water use for the cooling of hyperscale facilities. Indirect consumption (the water used by the infrastructure required to build and operate a data centre) can be more than 10x that of direct consumption [21].