Australia urged to become leading AI hub in 2–3 years

A new report by Deloitte identified a potential $134 billion injection into the economy and the creation of 14,300 new jobs every year until 2050, revealing that Australia’s AI infrastructure is lagging.

Australia’s AI transformation has reached a new milestone with the federal government releasing its guidance, Expectations of data centres and AI infrastructure developers, which aims to prioritise Australia’s national interest, the energy transition, sustainable water use, Australian skills and jobs, and research, innovation, and local capacity.

The report was published last week and outlines the path for the nation to deliver AI for the country through the establishment of data centres in line with its National AI plan released in December 2025. The federal government has previously released other plans for Australia’s AI transformation, including Australia’s AI Action Plan (2021) and the Productivity Commission’s Harnessing AI for growth interim report (2025).

On Friday (27 March), the NSW government announced that 15 data centres would progress through the Investment Delivery Authority (IDA) in line with its NSW Data Centre Consultation Paper in response to this release.

Federal Treasurer Jim Chalmers has urged the nation to embrace AI as a transformative force to maximise the country’s opportunities and position itself as a global leader in AI innovation. Deloitte highlighted that Australia is currently behind in AI adoption compared to APAC counterparts.

In a report commissioned by Google LLC, Digital infrastructure for the AI age: Australia’s opportunity to lead the Asia Pacific, Deloitte Access Economics identified emerging AI hubs within the Asia-Pacific region, including Japan, India, Thailand, and Malaysia, which have invested billions into AI infrastructure and Singapore, which invested a total of nearly $1 billion into its AI industry.

Deloitte predicted that with sufficient growth in AI infrastructure investment, through AI, Australia would generate 14,300 new jobs per year, with a peak of 19,100 jobs added in 2030 and add a cumulative $133.6 billion to the economy by 2050, over and above an organic growth scenario.

According to the report, to lead in AI, Australia must invest in high-quality local infrastructure such as data centres located close to end users for reduced latency and effective edge computing, high-speed terrestrial and subsea cables for the efficient and secure movement of vast amounts of data, and a stable supply of local clean energy, which also minimises the carbon footprint.

Deloitte Access Economics partner and lead author of the report, John O’Mahony, said: “The chance to build an Asia Pacific-focused digital infrastructure ecosystem represents the opportunity to build the next great Australian industry that could support our continued national prosperity for decades to come.”

O’Mahony stressed that Australia must double its investment in computing power over the coming five years. The report estimates that around $52 billion in infrastructure investment between 2026 and 2030 is needed to scale capacity, enable advanced AI applications, and secure long-term competitiveness.

The report urged that Australia must move quickly within the next two to three years to capitalise on the AI opportunity: “If Australia does not move quickly, demand for digital infrastructure will be satisfied by these APAC countries, who will reap the economic benefits of higher productivity.”

According to the report, Australia is set to generate around 3.3 gigawatts of data centre capacity by 2030. However, it stressed that the nation would need to add a further 3.1 gigawatts of high-quality computing power to quadruple our current national capacity.

In addition, the report stated non-economic benefits of investing in digital infrastructure, including strategic AI clout, resilience to crisis, cyber security, clean energy investment, reputation as a knowledge economy and forward-looking investment, and AI policy sovereignty.

It said that this investment growth would also benefit sectors like construction, utilities, renewables, mining, healthcare, and financial services and strengthen the nation’s IT and start-up ecosystem through increased AI activity.

“Australia can and must become an AI nation to build economic prosperity by driving productivity. Much of the economic potential for Australia is in our own backyard – in the Asia Pacific region alone, investment in AI will exceed $165 billion by 2028,” Pradeep Philip, head of Deloitte Access Economics, said.

Minister for Industry and Innovation and Minister for Science, Tim Ayres, said: “Australia has a significant number of national challenges to solve – and AI, data centre investment and advanced industrial and technological capability can help us get there.

“Securing this infrastructure onshore strengthens our security, supports our start-ups and researchers and ensures Australian data benefits Australians – not offshore jurisdictions.”

Data centres: A powerful tool to catalyse the energy transition

Minister for Climate Change and Energy, Chris Bowen, said: “Data centres have great potential to support our grid and expand new renewable investment, but it’s important we work together across jurisdictions and with industry to get the investment settings right so that we can continue to keep our system secure and energy prices low for all consumers.”

Deloitte’s report noted that digital infrastructure does not require significant energy input, which prompts moves to procure energy from clean resources.

It noted that new digital infrastructure, in particular hyperscale data centres, is increasingly being designed to bring their own energy through pairing construction with the development of new renewable power sources, with many of these new data centres being accompanied by power purchase agreements (PPAs).

These PPAs secure their own clean energy supply, with the report noting that many data centre operators have already committed to 100 per cent renewable energy by 2030.

PwC released a statement welcoming the federal government’s expectations guidance, recognising the scale, global opportunity, and the importance of getting policy settings right to attract and retain long-term investment.

PwC global capital projects and infrastructure lead Clara Cutajar said that the success of these expectations depends on collaboration between the public and private sectors to make Australia a leading investment destination for the AI infrastructure required to support large-scale AI adoption and innovation.

Cutajar said: “Aligning government policy, investor confidence, energy strategy, planning systems and industry capability is what will ultimately determine whether Australia captures this moment and maximises the benefit.”

PwC Australia technology industry leader Louise King said: “Building a globally competitive, sustainable, and secure AI infrastructure ecosystem is in the national interest as we seek to realise the full benefits of an AI-enabled economy. As a firm, we look forward to playing our role in bringing industry and community together to get these settings right and unlocking the potential.”

In its report, Deloitte proposed eight key factors that Australia can harness, which can be a source of competitive advantage: land, electricity, water, demand, capital, labour, regulation, and time.

“A failure to seize this opportunity would represent a generational economic fumble,” O’Mahony said.

“The Federal Government, in partnership with the private sector, can create the new modern Australia. But the window is tight, and the race is on.”