The Australian government has released its National AI Plan, outlining a national framework for expanding compute capacity, strengthening digital backbone infrastructure and setting clearer expectations for data centre development as demand for AI accelerates. The plan backs a national framework focused on domestic compute capacity, energy-aligned data centre growth and coordinated investment settings, while stepping back from earlier proposals for standalone AI regulation.
The plan identifies domestic compute and connectivity as critical enablers of AI adoption, with a focus on ensuring access to advanced chips, expanding high-quality hosting capacity and supporting the subsea cable systems that underpin international links. The government says stronger coordination between federal and state agencies will be required as operators scale facilities and electricity demand rises.
New national data centre principles will guide future development. These cover renewable energy procurement, water efficiency, demand flexibility, security, and local workforce development. The government also intends to streamline planning processes for projects that align with these principles, while working with market bodies on the energy system impacts of rapid data centre expansion.
The plan notes that data centre power consumption reached about 4TWh in 2024 and could triple by 2030, prompting a focus on grid readiness, new renewable capacity and battery storage.
Broadly aligned
Equinix Australia managing director Guy Danskine said the company welcomed the plan’s direction and its emphasis on sustainable infrastructure. “We are broadly aligned with the Department of Industry, Science and Resources on the spirit of the eight data centre principles, which outline best practices for the industry,” he said. The tech-agnostic nature of the principles, he added, allows operators to match solutions to local conditions, including through renewable energy investment, water-use optimisation and strengthened connectivity.
Danskine said Equinix would continue working with government as the principles are finalised. “A cohesive plan involving Commonwealth and state collaboration is necessary to prepare the grid for the electrification of everything, and we encourage the government to support diverse energy delivery configurations, such as grid and onsite solutions, to meet the growing demands of AI,” he said. He added that industry-government collaboration could “simplify compliance, accelerate capital investment, and optimise land use for innovative projects, while supporting the development of much-needed residential communities.”
Positive intent
Data Centres Australia (DCA) chief executive officer Belinda Dennett said: “We are very pleased that the National AI Plan provides such strong recognition of Australia’s opportunity to be a leading market for data centre investment. The AI transformation is a global phenomenon with nations racing for strategic advantage. How we work together to establish appropriate policy settings will key to our success.”
“Our goal is to secure Australia’s place as a major hub for AI infrastructure investment and sustainable data centre development,” she said. “We therefore support the idea of national data centre principles to ensure investment is sustainable and aligns with Australia’s national interests, noting that alignment with states and territories will be an important enabler, ensuring consistent implementation.”
Dennett added that speed to build is the most critical factor in securing data centre investment, so the DCA welcomed measures that can help accelerate and streamline the permitting and utility connection process. “More flexible and parallel approval processes would be a positive development,” she said.
“In addition to planning, energy and water resources challenges, workforce development is a key input to how we maximise the data centre opportunity,” said Dennett. We are therefore supportive of the Key Apprenticeship Program, outlined in the National AI Plan to support apprenticeships in priority sectors like Ai infrastructure, clean energy and electricians.”
Not the EU model
Alongside the infrastructure measures, the National AI Plan marks a shift in regulatory policy. The government has opted not to introduce a standalone AI Act or mandatory guardrails previously under consideration, instead choosing to rely on existing technology-neutral laws and regulatory frameworks. A new AI Safety Institute will monitor emerging risks and advise on where additional interventions may be required.
The government says this approach is designed to avoid imposing excessive burdens while maintaining flexibility as AI systems evolve. It also leaves open the possibility of stronger regulation if significant risks emerge or gaps are identified.
The plan arrives amid strong investor interest in Australian data centres, with industry forecasts pointing to more than AUD 100 billion of proposed developments in the coming years. By setting clearer expectations around infrastructure, energy and planning, the government aims to provide greater certainty for operators as the next wave of AI-driven compute demand builds.
Other key points to the plan include using existing, technology-neutral laws to guide AI development and deployment and responding to growing demand for AI skilled workers. In terms of regulation it flagged reviewing how current rules apply to consumer protection, copyright, healthcare and workplace relations as the strategy to adopt. This would help identify gaps where stronger action may be needed in the future.