AUSTRALIA | Australia is uniquely positioned to capitalise on the global boom in AI-driven digital infrastructure, with the potential to generate over AUD 100 billion in onshore economic impact by 2030.
But capturing this opportunity will require Australia to address energy, planning and investment barriers to remain competitive, according to a new report.
The report, Australia’s Digital Infrastructure Challenge: Can data centres unlock sustainable long-term growth?, finds that demand for computing power is accelerating at unprecedented rates globally, fuelled by the adoption of generative AI, cloud expansion, and data growth.
While global computing capacity is expected to more than double by 2030, demand is still outpacing supply.
“Australia has an opportunity to capture the growing market opportunity both locally and globally,” said Chris Mattey, Managing Director and Partner at BCG.
“But we’re reaching a point where challenges around power, approvals and infrastructure delivery are becoming more important in investment decisions. Investors are moving quickly, and continued progress on these issues will be important if Australia wants to capture its share of future growth.”
Australia is already one of the largest data centre markets in Asia-Pacific, with approximately 1.8GW of installed capacity in 2025 and is well placed to capture a greater share of future demand thanks to its renewable energy resources, strong connectivity and stable regulatory environment.
However, the report warns Australia must act decisively or risk losing investment to faster-moving regional competitors.
A once-in-a-generation economic opportunity
The analysis shows that developing an additional 2.5GW of data centre capacity by 2030 could unlock:
AUD 100 billion in domestic economic activity (onshore) from construction and enabling energy infrastructure
AUD 10 billion per year in ongoing economic activity once facilities are operational
Significant indirect benefits across supply chains, energy systems and regional economies
The opportunity is being driven by a structural shift in how and where computing is delivered. Increasingly, AI workloads, particularly model training and inference, are “latency-tolerant”, meaning data centres can be location agnostic and can be built in locations with optimal energy and infrastructure conditions.
This shift creates a major opening for Australia to capture a growing share of Asia-Pacific demand by 2030.
Four critical challenges to unlock growth
Despite strong fundamentals, the report finds Australia is approaching an inflection point, with four key constraints increasingly limiting growth:
- The “power paradox”
Realising the data centre opportunity for Australia will require careful balancing of energy reliability, affordability, decarbonisation, and investment considerations, particularly as governments, energy providers, and the technology sector navigate how new AI and, therefore, energy demand interact with an already evolving energy system. - The investment “chicken-or-egg” problem
Developers won't commit capital without anchor customers, while hyperscalers won't sign contracts without guaranteed power and delivery timelines. Fragmented planning and policy uncertainty worsen this deadlock, stalling otherwise viable projects. - Fragmented planning and infrastructure “micro-decisions”
Data centre development is now concentrated in Sydney and Melbourne (over 60 percent of Australia’s capacity), as individual investment decisions naturally gravitate toward established hubs with existing connectivity, infrastructure and available power, limiting broader system coordination and regional development opportunities. - Intensifying global competition
APAC markets, including Singapore, Malaysia, India and Japan, are actively attracting investment through coordinated policies, incentives and streamlined approvals, putting pressure on Australia.
Window for action narrowing
The report emphasised that while Australia retains significant structural advantages in renewable energy potential, subsea connectivity and investor confidence, these alone will not secure future investment.
As hyperscalers and global investors prioritise speed, certainty and energy availability, delays in approvals, grid connections and infrastructure delivery could shift capital elsewhere.
A strategic opportunity for Australia’s future
For Australia to strengthen its economic resilience, sovereign capability, and global competitiveness in the AI era, it must successfully scale its digital infrastructure. However, the next 12 to 18 months will be pivotal. Without decisive action, Australia risks missing a rare opportunity to capture the growing market locally, in APAC, and globally.
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