Key facts
- Australia plans to introduce new AI legislation and establish an AI office.
- New regulations will require data centres to fund power supply and contribute energy to the grid.
- Environmental groups are calling for a moratorium on new data centre approvals until regulations are established.
- Queensland was the sole holdout on new data centre standards at a recent energy and climate change ministerial meeting.
- New York state has implemented a one-year moratorium on hyperscale data centre approvals.
Australian Prime Minister Anthony Albanese has announced plans for new AI legislation and an AI office, aiming to foster local innovation and manage the significant energy and infrastructure demands of data centres. In a speech at the University of Sydney, Albanese stated that large-scale data centres would be legally obligated to underwrite new power supply, pay their full share of grid connection costs, and add as much energy to the grid as they consume.
These proposed national standards aim to create greater clarity and speed in data centre approvals, addressing concerns about fragmented regulation across different government levels. However, environmental and community groups are calling for a moratorium on new data centre development until these regulations are firmly in place, citing potential impacts on energy prices, climate pollution, land use, and community expectations.
Queensland was noted as the sole holdout on the proposed standards at a recent energy and climate change ministerial meeting, raising concerns about a potential 'race to the bottom.' The peak industry body, Data Centres Australia, has indicated a desire to reach 100% renewable power but noted the difficulty in matching renewable energy project timelines with data centre development. New York state has already implemented a one-year moratorium on hyperscale data centre approvals, a move echoed by calls for similar action in Australia.
The government's broader AI strategy also includes fostering domestic innovation rather than merely serving as a 'data warehouse' for foreign AI products. Legislation is expected to be considered by parliament in early 2027, with a national cabinet meeting scheduled to discuss AI and data centre rules next month. The challenges of regulating powerful global tech giants and addressing widespread job loss fears due to AI remain significant.