As AI adoption surges, global demand for computing power and the data centres that provide it are growing faster than ever. Deploying new applications, managing growing data volumes, and building new models all depend on reliable, large-scale digital infrastructure.
In this report, we examine the growth of the global data centre market, Australia’s competitive position, and the opportunities associated with a thriving domestic digital infrastructure sector. We also consider the emerging challenges, system constraints and trade-offs that are becoming more pronounced as demand for computing capacity accelerates both locally and globally.
Why This Matters for Australia: A Growing Digital Infrastructure Opportunity
Australia is already one of the largest data centre markets in the Asia Pacific, with approximately 1.8 GW of installed capacity in 2025 and one of the highest data centre capacities per capita worldwide.
Australia’s data centre capacity is projected to more than double from 2025–2030. If Australia positions itself as an Asia-Pacific destination for GenAI compute and effectively removes investment constraints, capacity could expand further.
Historically, data centres required proximity to end-users, but a growing share of GenAI training and inference workloads are increasingly latency-tolerant (i.e. not sensitive to delays in data travelling between locations). This shift provides developers with far greater flexibility in site selection, which expands the potential economic opportunity beyond major cities to regional areas and creates a significant total addressable market for Australian-hosted data centres to serve domestic and Asia-Pacific customers.
Developing 2.5 GW of data centre compute capacity could generate approximately $100 billion or more in locally retained economic impact across 2026-2030. However, the opportunity will depend on how Australia navigates emerging constraints around energy availability, investment sequencing, infrastructure concentration, permitting and delivery timelines.
Australia Is Approaching an Important Inflection Point
To date, various structural factors have helped to attract digital infrastructure investment into Australia. With the emergence of Generative AI driving unprecedented growth in data centre capacity, and in an increasingly competitive regional market, these factors alone may not be enough to continue to secure investment.
Australia is now approaching an important inflection point. As demand for digital infrastructure accelerates, emerging pressures and constraints that have not materially affected growth to date are becoming more pronounced.
To capitalise on the economic opportunity that stems from building digital infrastructure, Australia will need to create the best possible position to secure future investment by addressing four challenges:
- The power paradox - managing the increasing need for electricity availability
- The chicken-or-egg dilemma - investment sequencing and delivery certainty
- The shackles of micro decisions - managing concentration and long-term infrastructure planning
- The data centre race - competing for global data centre investment
Addressing these challenges is achievable but will require coordinated action. The years ahead are likely to play an important role in determining how Australia positions itself within the next phase of global digital infrastructure and AI development.
Download the full report to explore Australia’s potential to capture the next wave of AI-driven infrastructure growth, while managing the energy, planning and community impacts that will affect sustainable long-term growth.
