Australia stands isolated among developed nations, maintaining a “relentless determination” not to invest in sovereign AI infrastructure while global competitors pour billions into national compute facilities and AI data centres. As director for UNSW AI Institute Dr Sue Keay recently warned [1], this strategic blindness is creating an existential threat to Australia’s sovereignty, leaving the nation vulnerable to foreign control of critical data and infrastructure, economic coercion from tech giants and the loss of ability to shape home-grown AI systems.
Equinix managing director, Australia, Guy Danskine, reckons Australia stands at a pivotal moment in the global push for AI leadership and has a genuine opportunity to lead in particular areas of AI.
“Although many homegrown startups are developing innovative AI technologies, the nation trails many international countries in terms of investment and supportive policy frameworks,” he tells W.Media. “According to OECD reports, Australia invested AUD 602 million in AI in 2023, which is just 0.03% of GDP. By comparison, the United Kingdom invested AUD 3.1 billion, bolstered by academic partnerships and private-sector collaboration (.10% of GDP).”
While other countries have already made significant progress, Danskine still believes Australia has an opportunity by developing a coordinated national AI strategy and fostering public-private partnerships. “With its strategic location, strong regulatory frameworks, and expanding digital infrastructure, Australia can emerge as a preferred destination for AI training and inferencing, offering proximity to regional hubs, low-latency connectivity and access to thriving innovation ecosystems through platforms like Equinix,” he says.
He adds: “It’s clear that building secure, high-performance infrastructure would help drive innovation, attract global talent, and ensure digital sovereignty. With the right investment and policy direction, Australia is well positioned to lead in responsible, high-impact AI development across sectors.”
Conspicuously absent
While Taiwan commits over AUD 10 billion to AI infrastructure as part of its “Grand Strategy for a Small Country,” South Korea dedicates KRW 2 2.5 trillion to national AI computing centres and Japan deploys government-funded supercomputing with Nvidia H200 GPUs, Australia remains conspicuously absent from federal AI infrastructure investment, relying instead on fragmented state initiatives and foreign-owned systems that consume Australian resources while generating minimal local benefit.
“Equinix encourages the federal government to create policy settings that allow Australia to fully leverage its unique advantages. In the AI era, that means investing in a globally competitive workforce, harnessing our access to renewable energy and encouraging both local and international investment,” says Danskine. “A national framework to expedite project approvals would be welcomed, particularly one that considers cost as one of several evaluation criteria.”
“It’s important to understand that sovereignty needs to be by strategic criteria such as established certifications and operating track record, not solely by the location of a company’s headquarters,” he says. “We need to ensure we don’t isolate data but encourage global collaboration to avoid fragmented and biased outcomes of AI services, subject to appropriate controls and prioritisation.”
He warns: “If we do, this approach could deter overseas investment, ultimately hindering technological advancement and economic growth of the country.”
Danskine uses the examples of initiatives like Gaia-X which are not about replacing global cloud providers but in this case, ensuring that Europe retains control, choice, and standards in how AI is developed and deployed.
“Similarly, in Australia, sovereignty shouldn’t mean excluding global players,” he emphasises. “Rather, it should mean establishing baseline sovereign infrastructure to protect national interests and ensure data residency.” He uses the example of Equinix’s network of more than 270 data centres across 76 metropolitan areas in 36 countries being able to let organisations store and manage data within specific geographic locations while ensuring adherence to local jurisdictional requirements.
Initiatives like Gaia-X highlight how aligning infrastructure investment with governance, open data and ecosystem development can rapidly scale AI capability. In these cases, infrastructure is treated as a strategic asset, not just a commercial utility.
“In Australia, we need to shift the mindset around data centres and compute capacity. Sovereign compute should be considered a critical part of our national infrastructure, on par with energy, transport and defence,” he says. “These programs also show how that public-private ecosystems are essential. When governments and industry collaborate, they create the conditions for long-term innovation, resilience and strategy autonomy.”
Only half the story
The country’s focus on regulation without infrastructure investment represents a fundamental misunderstanding of sovereignty in the AI era – you cannot regulate what you do not control, and Australia is rapidly ceding control of the technology that will define its economic and strategic future.
“Responsible AI development requires both strong governance and robust infrastructure,” says Danskine. “Given the pace of AI adoption, it’s not surprising that the focus to date has leaned toward infrastructure. Foundational investment in sovereign AI capabilities is essential, and work is already underway to address that in balance, including the rapid growth in data centre development across the country.”
He argues that to maintain momentum, Australia must set the right policy conditions that will support investment from both in and outside the country that will focus on building a competitive workforce that can take advantage of the AI opportunity ahead.
“Organisations are rapidly advancing their AI strategies, and with more mature training models vertical-specific and trusted, we anticipate companies will spend more time on AI inference at the edge,” he says.
“This enables real-time decision making, ensures data is processed locally in proximity to data sources, and allows organisations to react immediately to AI inference insights, where milliseconds matter.”
He adds: “Running AI inference at the edge also increases overall efficiency, enhances data privacy and security, strengthens reliability, improves user experience and enables predictable costs.”
Danskine believes Australia has the potential to become a preferred destination for AI inferencing, offering proximity to regional data, low latency connectivity, and access to “thriving innovation ecosystems”.
He points to new data from Knight Frank which says the Asia-Pacific region leads global data centre investment, capturing USD 15.5 billion in 2024. The market is set to continue rapid growth, driven by the rapid uptake in AI workloads. Knight Frank also notes Australia holds a strategic advantage in the AI race, as one of only four nations in the region with an exemption on export restrictions on AI chips.
Beyond critical infrastructure
Digital infrastructure is already critical infrastructure, according to Danskine. But he argues AI capability extends beyond this – it includes skills, access to capital, and to renewable energy to meet the demands of high-performance computing. These are the defining factors of a nation’s AI strength.
“Equinix works closely with customers to meet data processing and storage requirements across jurisdictions,” he says. “Many deploy distributed infrastructure and user location-specific compute, power, and storage resources, connecting them via fast, private and secure physical and virtual networks.”
“Additionally, Equinix also enables organisations to leverage global AI models and datasets and our AI-ready data centres are strategically located in the world’s most connected markets and provide the scalable infrastructure foundation enterprises need to advance their AI capabilities,” he adds.
As a certified strategic data centre provider, Equinix Australia aligns with the Department of Home Affairs, Hosting Certification Framework (HCF) that ensures an effective approach to data sovereignty is in place. Danskine believes that any new regulations associated with AI should leverage from existing programs such as the HCF.
Government must have a role
Australian state governments are ramping up support for digital infrastructure, with NSW launching a new delivery authority for critical technologies and Tasmania backing Firmus Technologies’ AI factory zone in the state’s north. Danskine highlights that while government backing can accelerate development, significant private sector investment in data centres is already underway across Australia, demonstrating that progress is possible without public funding alone.
“That said, the government plays a vital role in enabling success,” he argues. “This includes streamlining planning approvals, investing in sustainable energy infrastructure, supporting local manufacturing to build the necessary equipment, and funding education and training to build a future-ready workforce for AI and data centre operations.”
[1] https://w.media/australias-ai-infrastructure-inaction-is-creating-a-strategic-risk/
The Sydney Cloud & Datacenter Convention will be held at the Sydney International Convention Centre on 21 August 2025 from 8AM to 8:30PM. Please submit your registration for attendance at: https://clouddatacenter.events/events/sydney-cloud-datacenter-convention-2025/
[Author: SIMON DUX]