The South Australian government has unveiled plans for dedicated data centre legislation as it seeks to position the state as a destination for large-scale AI infrastructure investment. Premier Peter Malinauskas this week announced a new Data Centre Strategy centred on the proposed introduction of a Data Centre and AI Infrastructure Act, alongside planning reforms intended to accelerate the development of data centres and AI facilities.
The proposed legislation would establish a dedicated framework for the sector, with the government outlining measures including streamlined approvals, a dedicated planning pathway, support for renewable-energy-powered developments, industry partnerships, and support for AI research and development.
Under the proposal, data centres would be designated as essential infrastructure through amendments to the Planning, Development and Infrastructure Act, while the Coordinator-General would be empowered to take on decision-making functions for major projects. The government also said future applications would require confirmation from SA Water that sufficient water supplies are available and certification from the Technical Regulator that projects comply with the requirements of the state’s power system.
“AI represents the single biggest source of growth in the global economy,” Malinauskas said. “We need data centres in Australia. As a state, we’ve got a choice to either embrace it and seek to utilise it where we can or let others have the opportunity and regret it later down the track.”
AI factories arrive
The announcement comes as South Australia emerges as a focal point for a new generation of AI factory developments. Earlier this year, IREN unveiled plans for an 800MW AI data centre campus at Bundey in the state’s Mid North. The company said the site was selected for its proximity to high-voltage transmission infrastructure and access to renewable energy resources, with the development forming part of its broader AI infrastructure strategy.
The state has also attracted interest from AI infrastructure company Firmus Technologies, which recently confirmed that sites near Tailem Bend and Port Augusta form part of its Project Southgate AI factory initiative. Firmus said details of renewable energy investments supporting the developments would be announced in the coming weeks, with the projects expected to be backed by new renewable generation and firming infrastructure.
Together, the projects point to growing competition between Australian states to attract AI infrastructure investment as demand for GPU capacity accelerates.
South Australia is seeking to leverage its renewable energy resources as a competitive advantage, with Energy and Mining Minister Tom Koutsantonis highlighting the state’s AUD 32 billion renewable energy pipeline as a key enabler for future data centre growth.
The government has also sought to address concerns around water consumption, arguing that advances in cooling technologies and the growing use of closed-loop cooling systems have reduced water requirements compared to older facilities.
While the government has outlined the broad framework for the initiative, a detailed strategy document was not immediately identifiable through publicly available government sources at the time of publication, and further details on the proposed legislation, approval pathways, and implementation timetable are yet to follow.
The proposed legislation appears aimed at providing greater certainty around planning, energy and water approvals as data centre developments increase in scale from traditional enterprise and colocation facilities to AI factories requiring hundreds of megawatts of capacity.