Launceston is set to become the heart of Australia’s AI economy after the City of Launceston approved plans for Firmus Technologies’ flagship “AI Factory” in St Leonards. The $2.1 billion development, co-announced with the Tasmanian Government in July, will see construction begin on Project Southgate — a purpose-built campus of next-generation, liquid-cooled AI infrastructure designed to run on Tasmania’s world-class renewable energy.
At a special meeting this week, council endorsed the planning permit for the five-hectare site, which will include two large server halls, an office building, and 24/7 operational capacity with around 30 staff on site. According to Pulse Tasmania, strict conditions have been imposed to manage environmental and community impacts, including requirements for landscaping, stormwater treatment, noise attenuation and site contamination management.
Launceston Mayor Matthew Garwood said the development represented a turning point for the city’s economy. “This project really puts Launnie on the map as a hub for digital innovation,” Garwood said. “It’s about more than just data. It’s about harnessing Tasmania’s renewable energy advantage and making sure our city is at the forefront of Australia’s AI and tech economy.”
Speaking at the time of the launch, Firmus co-CEOs Oliver Curtis and Tim Rosenfield said the facility would not resemble traditional data centres. “AI Factories are purpose-built to power, train and inference artificial intelligences,” Curtis said. “With Tasmania’s clean energy and our AI Factory platform, we believe this will be the most cost-effective, sustainable AI facility in the world.”
Stage 1 of the project will deliver a combined 90MW of AI infrastructure in Northern Tasmania by 2026, beginning with 44MW in Stage 1a and expanding to 90MW in Stage 1b. A further 300MW is planned in a future second stage, subject to approvals.
Tasmanian Premier Jeremy Rockliff, also speaking at the launch, said the development would secure the state’s place as a global leader in sustainable AI. “Tasmania is set to lead the world in sustainable artificial intelligence with the creation of a world-first AI Factory Zone in Northern Tasmania,” he said. “This is about turning Tasmania’s clean energy into opportunity – for jobs, for innovation, and for global leadership in the future of artificial intelligence.”
Firmus says the AI Factory will consume up to 60% less energy and cost up to half as much to construct as conventional data centres, while creating up to 100 direct jobs in its first stage and supporting hundreds more through construction, energy, and technology supply chains. Construction of Project Southgate is expected to begin shortly, with the AI Factory scheduled to be operational by mid-2026.