Australian AI infrastructure start-up Southern Cross AI (SCX.ai) has launched what it claims is the country’s first sovereign AI inferencing node, deployed at Equinix’s SY5 data centre in Sydney, targeting enterprises and government agencies requiring onshore data processing and lower environmental impact.
The company claims the system will deliver AI inferencing that is ten times more energy efficient than traditional GPU-based infrastructure, while eliminating the need for water-based cooling. The deployment comes as global data centre operators face increasing scrutiny over AI-related power consumption and water use.
The node, installed at Equinix’s SY5 International Business Exchange data centre, enables AI workloads to be processed within Australia, addressing data residency and sovereignty requirements for regulated sectors such as financial services, healthcare and government.
“This represents a fundamental shift in how Australia can deploy AI at scale,” said David Keane, founder and chief executive of SCX.ai. “We’re delivering enterprise-grade AI infrastructure that doesn’t require massive water consumption for cooling and operates at a fraction of the energy cost of GPU-based systems. For Australian organisations handling sensitive data, this means they can finally run advanced AI workloads onshore without compromise.”
SCX.ai said the system avoids the trade-off many Australian organisations currently face between using offshore AI services or delaying deployment while waiting for domestic infrastructure. According to the company, all AI processing takes place within Australia, with no data transferred offshore.
The start-up also claims the node achieves the lowest carbon output per AI token of any facility currently operating in the Asia–Pacific region, although no independent verification data was provided at launch.
ASIC-accelerated architecture
The infrastructure is based on ASIC-accelerated architecture through a partnership with US-based SambaNova Systems. SCX.ai said the use of application-specific integrated circuits enables higher inference throughput per watt than conventional GPU-based platforms, allowing sustained, high-density AI workloads in a colocation environment.
In addition to energy efficiency and data sovereignty, SCX.ai highlighted latency as a key benefit of the Sydney-based deployment. Locating the node in what it described as Australia’s primary digital corridor allows real-time AI applications to run locally, avoiding the latency associated with offshore processing.
The deployment is hosted at Equinix SY5, a facility designed to support high-density compute and AI workloads. Equinix said the site provides access to carrier-dense connectivity, cloud on-ramps and private interconnection services.
“AI is fundamentally reshaping digital infrastructure requirements,” said Equinix Australia managing director Guy Danskine. “Sovereignty has become a critical consideration for organisations. Equinix’s global and high-performance AI ecosystem enables organisations to develop AI in Australia while remaining seamlessly connected to global clouds, partners, and innovation, without compromising security or control.”
Local LLM
Alongside customer workloads, the infrastructure will support Project MAGPiE, SCX.ai’s Australian-focused large language model. The company said the model has demonstrated competitive performance in local benchmark testing and is designed to better reflect Australian language, terminology and cultural context than overseas models.
Servers Australia, an Australian-owned IT infrastructure provider, is supplying local technical support and managed services for the deployment. SCX.ai said this would contribute to domestic high-skilled employment in AI infrastructure operations. The Sydney deployment is the first in what SCX.ai described as a planned national network of sovereign AI nodes. Additional sites are scheduled to be rolled out during 2026 to expand capacity, reduce latency for regional users and meet growing demand for domestically hosted AI services.
SCX.ai said the expansion would allow Australian organisations to retain greater control over data governance, performance and environmental impact as AI adoption accelerates across the economy.