Australia plans limits on suburban AI data centres

The Albanese government plans to ban AI data centres from being built near homes and recreational facilities.[1] It is drafting legislation to regulate data centres and considering restrictions on major AI facilities in suburban neighbourhoods.[2] The proposal comes after voter backlash over large data-centre developments in inner Sydney and Melbourne suburbs.[1] Assistant Minister Andrew Charlton has argued that Australia needs data centres, but not facilities that make poor neighbours.[4] He said the government’s approach is to reject data centres that provide nothing in return, rather than ban all data centres.[4]

Charlton referred to the Prime Minister’s new Australian Standards for AI data centres.[4] He said the standards would require operators to add to energy supply, use water responsibly, train Australians and contribute to research.[4] Charlton also said data centres support services including banking, education, news, groceries and Medicare.[4] He argued that if Australia did not build data centres domestically, facilities would instead be located overseas, including in Singapore, Tokyo and Virginia.[4] These standards and the proposed restrictions form part of a debate over what operators should contribute and where facilities should be built.[1][4]

Data-centre operators warned that the government’s unclear position risks investment in Australia.[2] Greenpeace argued that moving development out of suburbs without addressing underlying problems would shift the issue to regional Australia.[3] It said some regional proposals are in more water-scarce and environmentally sensitive areas, near sources of fracked and coal seam gas.[3] Greenpeace identified the Beetaloo Basin in the Northern Territory and Western Downs in Queensland as places where proposals could drive new gas development, which it warned could threaten Australia’s energy transition.[3] It also said communities including Berry Springs and Dalby did not want data centres that bring no local benefit.[3]

The government is also changing its plans to allow technology companies to scrape internet content freely without compensating creators.[1] OpenAI and Anthropic are the companies named in the copyright-regime discussion.[1] The two policy issues raise separate questions for companies: where facilities may be built, and what rules will govern use of online content.[1]