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With a global boom in AI, does Australia need more data centres?

Person on phone using AI technology.

As the use of Artificial Intelligence surges around the world, the number of data centres required to power the technology is also growing rapidly, including in Australia. Credit: Supplied

As the use of Artificial Intelligence surges around the world, the number of data centres required to power the technology is also growing rapidly, including in Australia. Now the Federal Government is laying out a plan aiming to ensure sustainability, as investment in data centres grows.


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TRANSCRIPT

From searching the web, to getting answers from an AI chatbot, these queries all require data centres to function.

"That query travels from your device down a fiber optic cable to a data centre, which is a large facility full of server racks containing high-powered processing chips. And this is where this query's processed and then returned to your device at speed."

Bronwyn Cumbo is a lecturer in Sustainable and Inclusive AI Futures at the University of Technology Sydney.

Speaking to SBS, she says more and more services are relying on data centres around the world.

"So, most parts of our modern digital society rely on data centres to function. So, if listeners think about the various platforms, apps, services that they rely on, from banking, health services, social media, public transport, streaming, all of these services really rely on data centres somewhere in the world to store and process their data."

Australia is home to more than 200 data centres, and is the world's second largest pipeline of data centre construction, after the US.

As investment into AI booms globally, data centres are trying to keep up with their use.

Late last year, the government launched a national artificial intelligence plan.

This week, it has unveiled its five national expectations for those looking to build or expand in Australia.

The listed expectations are: prioritise Australia's national interest, support Australia's energy transition, use water sustainably and responsibly, invest in Australian skills and jobs; and strengthen research, innovation and local capability.

Industry and Innovation minister Tim Ayres says Australia must maintain standards when investing in AI.

"It means that we're not going to have a race to the bottom, in particular on electricity and water use. We'll continue to work those issues through with our colleagues at the state and territory level, including led by minister Bowen, with the energy ministers. This is an enormous opportunity for Australia in economic growth, terms, and employment terms in competitiveness terms and in terms of our future economic resilience, the data centre expectations are an important overlay over that work."

In 2024, the International Energy Agency estimated a single Chat GPT query requires 2.9 watt-hours, that's around 10 times as much energy as a typical Google search.

"For instance, if a hundred thousand people each generated a five-minute AI video that used about 3.4 million joules of energy, the combined energy usage would power 5,000 to 6,000 Australian households for a single day."

While the government's expectations aren't legally binding, they are important for getting new investments approved.

Nigel Phair is a Professor of Cyber Security at Monash University.

He told SBS that Australia needs more data centres.

"We need more data centers in Australia. A, because of the compute power required for our use of AI, but also to be part of the global community. We've got a lot of land, we've got a lot of renewable energy we should be saying to other countries put your data centers and colocate your data with us in Australia."

Data Centres Australia CEO Belinda Dennett says if Australia doesn't invest in data centres, the country could lose some autonomy over Australian data.

"The alternative to not hosting the infrastructure here in Australia, is that we will be an importer of foreign technology and a 'client state' of foreign technologies, if you like. infrastructure is the really important part of the AI equation, Australia can do this. We've got all the elements that make us a great market."

However, some uncertainty remains around just how the expectations will be implemented, and what criteria will be used to assess projects and fast-track approvals.

The expectations are expected to be on the agenda when state energy ministers meet in May, and again when water ministers meet mid-year.

Brownyn Cumbo says it will be important to know how the centres will impact the communities they're placed in.

"I think the devil will be in the detail of what this means for local communities living alongside these facilities, the energy and water providers and distributors building the infrastructure to make this happen, and how this is aligned with state and government policies."


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