The Victorian state government has released a new AL mission statement that sets out an ambition to position the state as Australia’s leading AI hub, backed by targeted public investment and a strong emphasis on data centre infrastructure. The strategy claims AI could contribute up to AUD 30 billion in additional gross state product over the next decade, a figure that underpins much of the government’s economic case for accelerated adoption.
The document, titled Victoria: AI-Driven, Business-Ready, frames AI as a general-purpose technology comparable to the internet in its potential economic impact, while acknowledging the need for governance, workforce transition and public trust. It is explicitly aligned with the state’s Economic Growth Statement, which identifies digital technologies as one of Victoria’s priority sectors.
In her foreword, Premier Jacinta Allan describes AI as “rapidly transforming the world around us”, arguing that Victoria’s research base, technology sector and infrastructure position the state to “lead the nation in AI development and adoption”. She adds that the mission statement is intended to ensure AI is “developed and deployed in ways that are fair, transparent, and accountable”, signalling that ethical frameworks will sit alongside commercial objectives.
From an infrastructure perspective, data centres occupy a central role in the strategy. The government points out that more than 40 data centres are already operating in Victoria, supported by investment from hyperscalers and colocation providers including Amazon Web Services, Microsoft, NEXTDC, AirTrunk and CDC. The document argues that AI workloads will further accelerate demand for high-performance computing, interconnection and energy-intensive facilities, positioning data centres as “the backbone of the digital economy”.
To support that growth, the government has committed AUD 5.5 million to a Sustainable Data Centre Action Plan. While modest in direct funding terms, the plan is intended to unlock up to AUD 25 billion in private sector projects by improving site selection, planning coordination and workforce readiness.
Last year, Australia’s largest data centre market, New South Wales, already moved on this, establishing the Investment Delivery Authority (IDA) to accelerate major private projects (AUD 1+ billion ) by cutting red tape and facilitating approvals. The IDA identifies and removes barriers to major private, non-residential projects. It aims to unlock up to AUD 50 billion in private investment annually by aiding around 30 projects a year.
Government datasets
According to Victoria’s strategy, transport, water and energy datasets will be used to identify locations where data centres can be developed with lower environmental impact, including access to recycled water and renewable power sources.
The mission statement also points to recent private investment as evidence of momentum. NEXTDC’s planned AUD 2 billion digital campus at Fishermans Bend is cited as a flagship project, combining cloud infrastructure, AI-ready compute capacity and research-oriented facilities. The state government positions the development as a cornerstone of the broader Fishermans Bend Innovation Precinct, with expectations of job creation across digital infrastructure, advanced manufacturing and defence-related technologies.
Workforce transition
Beyond physical infrastructure, the strategy places significant emphasis on workforce transition. An AUD 8.1 million Digital Jobs – AI Career Conversion program is designed to retrain workers in roles considered vulnerable to automation, enabling them to move into AI-enabled occupations. The government argues that AI adoption will increase productivity and shift labour towards higher-value work, but acknowledges the need for reskilling to prevent displacement.
Melbourne’s existing AI ecosystem is presented as another competitive advantage. The city hosts 188 AI companies, accounting for around 22% of Australia’s clustered AI firms, the largest concentration nationally. Six Victorian universities already operate dedicated AI centres, and the state is seeking to leverage this academic base through commercialisation programs, research partnerships and targeted precinct development.
The mission statement also outlines a role for government as an early adopter of AI. Pilot programs across departments, including the use of AI tools to summarise documents and manage case material, are cited as proof points for productivity gains. A closed-loop chatbot trial involving 1,000 public sector users reportedly delivered time savings for around 80 percent of participants, according to the report.
While the document adopts an optimistic view of AI’s economic potential, it also highlights constraints that will be familiar to the data centre sector, including land availability, power and water coordination, and the need to balance speed of development with sustainability. Whether the relatively small level of direct public funding can materially influence investment outcomes remains an open question.
Nonetheless, the state government believes the strategy provides a clearer signal that Victoria intends to compete aggressively for AI-related infrastructure, which will not go unnoticed in other capitals including the largest market data centre market Sydney.
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