Australia and New Zealand AI infrastructure: the Pacific opportunity

Updated December 11, 2025

December 2025 Update: AWS announcing AU$20B Australian investment (2025-2029)—largest tech investment in Australia's history. OpenAI partnering with NextDC for A$7B Sydney GPU supercluster. Microsoft opening New Zealand's first hyperscale data center on 100% renewable electricity. Australia hyperscale market growing from $9.8B (2025) to $26.8B by 2030 at 22% CAGR.

Amazon announced AU$20 billion in Australian data center investment from 2025 to 2029, the largest global technology investment announcement in Australia's history.¹ OpenAI partnered with NextDC to build a A$7 billion large-scale GPU computing cluster in Sydney.² Microsoft opened New Zealand's first hyperscale data center in December 2024.³ The Australia hyperscale data center market will grow from $9.83 billion in 2025 to $26.78 billion in 2030 at a 22.19% compound annual growth rate.⁴ Australia and New Zealand emerged as the Asia-Pacific region's most attractive destinations for AI infrastructure investment.

The appeal extends beyond market size. Both countries offer reliable power grids, stable regulatory environments, robust connectivity to Asia, and skilled workforces. New Zealand's renewable electricity and Australia's energy transition create sustainability advantages for organizations with carbon commitments. The region positions itself as the natural hub for organizations requiring Asia-Pacific AI presence with Western governance standards.

AWS leads Australian investment

Prime Minister Anthony Albanese announced AWS's AU$20 billion investment to develop and expand data centers in Sydney and Melbourne.⁵ The commitment represents a major expansion of AWS's Australian presence and reflects confidence in long-term demand for cloud and AI services in the region.

The investment includes infrastructure development, operations, and maintenance through 2029.⁶ The scale positions Australia as a primary AWS region rather than a secondary expansion market. Enterprise customers gain access to capacity that previously required routing workloads through other regions.

AWS also launched a new infrastructure region in New Zealand, further strengthening its global network and sustainability positioning.⁷ The dual-country expansion creates redundancy options for organizations requiring regional distribution.

The investments follow a pattern of hyperscaler commitment to Australia. Combined with Microsoft and Google investments, the total data center investment is projected to reach $26 billion by 2030.⁸

OpenAI and NextDC create sovereign AI hub

OpenAI partnered with Australian data center operator NextDC to build a large-scale computing cluster in Sydney, accelerating Asia-Pacific expansion.⁹ The A$7 billion development focuses on NextDC's S7 data centre site at Eastern Creek.¹⁰

The campus will host a next-generation hyperscale AI campus and large-scale GPU supercluster.¹¹ The facility provides sovereign compute capability for government, finance, defence, research, and enterprise.¹² The sovereign focus addresses data residency requirements that prevent many Australian organizations from using offshore AI infrastructure.

NextDC has data centres in every major Australian city: Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra.¹³ The national footprint places infrastructure close to major enterprise and population centers.¹⁴ Ultra-high-density racks support deployment of next-generation GPU clusters including NVIDIA Blackwell.¹⁵

In May 2025, NextDC announced a historic increase in contracted utilization across its national data centre network.¹⁶ The Victorian data centre ecosystem benefited most, including the largest AI deployments ever recorded in NextDC's portfolio.¹⁷ In January 2025, NextDC announced plans for an 80-megawatt data center in Melbourne, one of the largest single investments in the Australian market.¹⁸

New Zealand's renewable advantage

Microsoft unveiled New Zealand's first hyperscale data centre on December 12, 2024.¹⁹ The facility gives businesses access to tools designed to supercharge productivity while maintaining data within New Zealand.²⁰ Microsoft described it as the most significant milestone in nearly 40 years of company history in New Zealand.²¹

The investment spans many hundreds of millions of dollars with room to expand.²² Microsoft purchased additional land for expansion, viewing New Zealand as an attractive country for investment, especially given the renewable energy opportunity.²³

The datacenter region operates on 100% carbon-free electricity through a 10-year agreement with Contact Energy for renewable attributes from the Te Huka 3 geothermal power station.²⁴ The renewable contract addresses sustainability requirements that increasingly influence infrastructure decisions.

Building energy-hungry data centres is a boom industry in New Zealand specifically because international companies seek to reduce climate impact using the country's renewable electricity.²⁵ Training and using AI requires substantial energy. A ChatGPT query needs nearly 10 times as much electricity to process as a Google search.²⁶ New Zealand's renewable grid provides sustainability advantages that fossil-fuel-dependent regions cannot match.

GPU cloud providers scale up

Sharon AI is deploying a 1,016-GPU cluster, the Sharon AI Supercluster, within NextDC's Tier IV data center in Melbourne.²⁷ The deployment marks a significant leap in Australia's sovereign AI capabilities.²⁸ The cluster builds on Sharon AI's existing fleet of NVIDIA H100, L40s, and A40 GPUs, with the first phase of H200 GPUs expected operational in Q2 2025.²⁹

Groq deployed its AI infrastructure in an Equinix data center in Sydney, marking the company's first Asia-Pacific deployment as part of its global expansion.³⁰ The inference-focused chipmaker's Australian presence provides alternatives to NVIDIA-based infrastructure for specific workloads.

Macquarie Cloud Services and Dell Technologies built a purpose-built sovereign cloud environment designed for research workloads.³¹ The platform supports high-performance storage, GPU acceleration, and compliance needs across universities, government, and defence.³² The sovereign approach ensures data stays within Australia and meets strict governance requirements.³³

Australia's data center capacity expanded nearly forty-fold over two decades, rising from 37 megawatts in 2005 to approximately 1,315 megawatts in 2025.³⁴ The growth trajectory accelerates as AI workloads drive demand for GPU-equipped facilities.

Government and industry alignment

The Australian government's National AI Plan, launched in 2025, emphasizes development of sovereign AI capabilities including investments in digital and physical infrastructure.³⁵ The policy framework creates favorable conditions for data center investment and provides clarity on regulatory expectations.

Australia's AI Opportunity Report 2025 estimates AI could contribute up to $142 billion annually to the nation's GDP by 2030.³⁶ The economic potential justifies infrastructure investments that enable domestic AI development and deployment.

A new peak body named Data Centres Australia was created to secure Australia's place as a major hub for AI infrastructure investment and sustainable development.³⁷ The organization works with government and stakeholders to address challenges in planning, energy, water, and workforce.³⁸

CBRE described Australia's data centre sector as having undergone significant transformation in recent years.³⁹ Rising AI-driven demand, resilient pricing, and a globally competitive cost base make it one of the most attractive markets for data centre investment.⁴⁰

Investment flows into the region

AustralianSuper invested AUD2.2 billion in US data centre operator DataBank in 2024, following a AUD2.5 billion stake in Vantage Data Centers EMEA in 2023.⁴¹ The investments demonstrate Australian institutional capital's appetite for data center exposure.

Blackstone led a consortium to acquire a majority stake in AirTrunk for AUD24 billion in late 2024.⁴² The transaction represents one of the largest data center deals in Asia-Pacific history and positions the investor for regional AI infrastructure growth.

The investment thesis benefits from Australia's structural advantages. The region offers access to Asian markets while operating under governance frameworks familiar to Western enterprises. The combination proves attractive for organizations requiring both market access and regulatory comfort.

Regional positioning and connectivity

Australia serves as the natural hub for organizations requiring Asia-Pacific AI presence with data sovereignty requirements. The distance from major Asian markets creates latency considerations, but submarine cable investments continue improving connectivity.

Organizations choosing between Australian and Southeast Asian infrastructure must weigh different factors. Australia offers more mature regulatory frameworks, deeper talent pools for specialized roles, and stronger alignment with Western business practices. Southeast Asian alternatives may offer lower costs and closer proximity to growth markets.

New Zealand provides specific advantages for organizations prioritizing sustainability. The renewable grid, smaller market size, and Microsoft's hyperscale investment create an option for organizations with stringent carbon requirements and tolerance for geographic distance from major markets.

Infrastructure planning considerations

The Australian market's maturity and hyperscaler presence reduce infrastructure risk for organizations entering the region. AWS, Microsoft, Google, and now OpenAI provide options that eliminate the need to build from scratch.

Sovereign requirements increasingly drive infrastructure decisions. Government, defence, and regulated industries may require Australian-located infrastructure regardless of cost comparisons with other regions. The OpenAI-NextDC partnership and Sharon AI supercluster directly address this demand.

Power availability will eventually constrain growth. While current capacity is expanding rapidly, the concentrated investment in Sydney and Melbourne may create bottlenecks. Organizations planning long-term should evaluate alternative cities where NextDC and others maintain facilities.

The renewable energy opportunity in New Zealand merits consideration for sustainability-focused organizations. Microsoft's Te Huka 3 agreement demonstrates that carbon-free computing is commercially viable in the region. The model may expand as other hyperscalers evaluate New Zealand opportunities.

Australia and New Zealand represent the most developed AI infrastructure opportunity in the Asia-Pacific region. The investment momentum through 2025 suggests the position will strengthen as hyperscalers and specialized GPU providers continue expansion.

Key takeaways

For regional planners: - Australia hyperscale market grows from $9.83B (2025) to $26.78B (2030) at 22.19% CAGR; capacity expanded 40x from 37MW (2005) to 1,315MW (2025) - AWS AU$20B investment (2025-2029) represents largest tech investment in Australia's history; positions Australia as primary AWS region - New Zealand's 100% renewable grid provides sustainability advantage; ChatGPT query uses 10x electricity of Google search

For enterprise infrastructure: - OpenAI-NextDC A$7B Sydney GPU cluster provides sovereign compute for government, finance, defence, research - Sharon AI deploying 1,016-GPU supercluster in Melbourne; H200 GPUs operational Q2 2025; Groq deployed first APAC inference infrastructure in Sydney - NextDC facilities in Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra; ultra-high-density racks support Blackwell deployment

For sustainability teams: - Microsoft NZ datacenter operates 100% carbon-free via 10-year Te Huka 3 geothermal agreement with Contact Energy - International companies seek NZ specifically for renewable electricity reducing climate impact; boom industry for carbon-conscious deployments - Data Centres Australia peak body addresses planning, energy, water, workforce challenges for sustainable development

For investment teams: - AustralianSuper: AUD2.2B in DataBank, AUD2.5B in Vantage EMEA; Blackstone consortium acquired AirTrunk for AUD24B - AI Opportunity Report 2025 estimates AI contributes up to $142B annually to Australian GDP by 2030 - CBRE: rising AI demand, resilient pricing, globally competitive cost base make Australia one of most attractive DC markets

For strategic planning: - Australia offers Asia-Pacific access with Western governance standards; mature regulatory frameworks, deep talent pools, alignment with Western practices - Power availability will constrain Sydney/Melbourne growth; evaluate Brisbane, Perth, Adelaide alternatives via NextDC network - New Zealand viable for carbon-focused organizations tolerant of market distance; Microsoft's model demonstrates commercial viability

References

1. About Amazon. "Amazon investing AU$20 billion to expand data center infrastructure in Australia." 2025. https://www.aboutamazon.com/news/aws/amazon-data-center-investment-in-australia

2. Bloomberg. "OpenAI, NextDC Plan to Develop Large-Scale Data Center in Sydney." December 2025. https://www.bloomberg.com/news/articles/2025-12-04/openai-nextdc-plan-to-develop-large-scale-data-center-in-sydney

3. Channel Life NZ. "Microsoft opens first hyperscale data centre in New Zealand." December 2024. https://channellife.co.nz/story/microsoft-opens-first-hyperscale-data-centre-in-new-zealand

4. Mordor Intelligence. "Australia Hyperscale Data Center Market Size, Share & 2030 Growth Trends Report." 2025. https://www.mordorintelligence.com/industry-reports/australia-hyperscale-data-center-market

5. About Amazon. "Amazon investing AU$20 billion."

6. About Amazon. "Amazon investing AU$20 billion."

7. RNZ News. "Data centres ride AI boom in world with finite renewable energy supplies." 2025. https://www.rnz.co.nz/news/national/536524/data-centres-ride-ai-boom-in-world-with-finite-renewable-energy-supplies

8. CRN Australia. "New National AI Plan wants to build a world-class AI ecosystem." 2025. https://www.crn.com.au/news/2025/legislation-and-regulation/national-ai-plan-2025

9. Bloomberg. "OpenAI, NextDC Plan to Develop Large-Scale Data Center."

10. Data Centre Magazine. "How Will $4.6bn NEXTDC AI Campus Drive OpenAI for Australia?" 2025. https://datacentremagazine.com/news/how-will-nextdc-ai-campus-drive-openai-for-australia

11. Data Centre Magazine. "How Will $4.6bn NEXTDC AI Campus Drive OpenAI for Australia?"

12. Data Centre Magazine. "How Will $4.6bn NEXTDC AI Campus Drive OpenAI for Australia?"

13. NextDC. "Why Leading GPU Cloud Providers Choose NEXTDC in Australia." 2025. https://www.nextdc.com/blog/why-leading-gpu-cloud-providers-choose-nextdc-in-australia

14. NextDC. "Why Leading GPU Cloud Providers Choose NEXTDC in Australia."

15. NextDC. "Why Leading GPU Cloud Providers Choose NEXTDC in Australia."

16. NextDC. "Why Leading GPU Cloud Providers Choose NEXTDC in Australia."

17. NextDC. "Why Leading GPU Cloud Providers Choose NEXTDC in Australia."

18. Mordor Intelligence. "Australia Hyperscale Data Center Market."

19. Microsoft News. "New Zealand's First Hyperscale Cloud is Open for Business." December 2024. https://news.microsoft.com/en-nz/2024/12/12/new-zealands-first-hyperscale-cloud-is-open-for-business/

20. Virtuoso. "Microsoft's first hyperscale data centre in New Zealand is imminent." 2024. https://virtuoso.tech/nz/microsofts-first-hyperscale-data-centre-in-new-zealand-is-imminent/

21. Microsoft News. "New Zealand's First Hyperscale Cloud is Open for Business."

22. Microsoft News. "New Zealand's First Hyperscale Cloud is Open for Business."

23. Microsoft News. "New Zealand's First Hyperscale Cloud is Open for Business."

24. Microsoft News. "New Zealand's First Hyperscale Cloud is Open for Business."

25. RNZ News. "Data centres ride AI boom."

26. RNZ News. "Data centres ride AI boom."

27. BusinessWire. "Sharon AI to Forge Australia's AI Future with Groundbreaking GPUaaS Supercomputer." March 2025. https://www.businesswire.com/news/home/20250311165400/en/Sharon-AI-to-Forge-Australias-AI-Future-with-Groundbreaking-GPUaaS-Supercomputer-Featuring-NVIDIA-Accelerated-Computing-and-Software

28. BusinessWire. "Sharon AI to Forge Australia's AI Future."

29. BusinessWire. "Sharon AI to Forge Australia's AI Future."

30. Data Center Dynamics. "Groq deploys AI infrastructure in data center in Sydney, Australia." 2025. https://www.datacenterdynamics.com/en/news/groq-deploys-ai-infrastructure-in-data-center-in-sydney-australia/

31. Macquarie Cloud Services. "AI, GPU Power & Sovereign Cloud: Insights from AeRO 2025." 2025. https://www.macquariecloudservices.com/blog/ai-gpus-and-the-future-of-australian-research-insights-from-aero-2025/

32. Macquarie Cloud Services. "AI, GPU Power & Sovereign Cloud."

33. Macquarie Cloud Services. "AI, GPU Power & Sovereign Cloud."

34. NextDC. "Why Australia is Becoming the New Global Hub for AI Infrastructure." 2025. https://www.nextdc.com/blog/ai-shift-to-australia

35. AInvest. "Australia's Emergence as a Global AI Infrastructure Hub." December 2025. https://www.ainvest.com/news/australia-emergence-global-ai-infrastructure-hub-strategic-implications-data-center-operators-investors-2512/

36. DLA Piper. "Riding the AI wave: Australia's booming data centre investment opportunity." March 2025. https://www.dlapiper.com/en/insights/publications/2025/03/australias-booming-data-centre-investment-opportunity

37. CRN Australia. "New peak industry body established in Australia for Data Centres." 2025. https://www.crn.com.au/news/2025/data-center/new-peak-body-data-centres-australia

38. CRN Australia. "New peak industry body established in Australia for Data Centres."

39. Commercial Real Estate. "How the AI surge is fuelling Australia's data centre investment boom." 2025. https://www.commercialrealestate.com.au/news/the-ai-surge-fuelling-australias-data-centre-investment-boom-1424227/

40. Commercial Real Estate. "How the AI surge is fuelling Australia's data centre investment boom."

41. Discovery Alert. "AI Data Center Infrastructure Investment Risks 2025." 2025. https://discoveryalert.com.au/data-centre-buildout-ai-infrastructure-2025/

42. Discovery Alert. "AI Data Center Infrastructure Investment Risks 2025."

SEO Elements

Squarespace Excerpt (159 characters): AWS invests AU$20B in Australia. OpenAI-NextDC build $7B Sydney GPU cluster. Microsoft opens NZ hyperscale. The Pacific emerges as AI infrastructure hub.

SEO Title (55 characters): Australia New Zealand AI Infrastructure: Pacific Opportunity

SEO Description (155 characters): AWS invests AU$20B, OpenAI-NextDC plans $7B Sydney cluster, Microsoft opens NZ hyperscale. Analysis of Australia and New Zealand AI infrastructure opportunity.

URL Slugs: - Primary: australia-new-zealand-ai-infrastructure-data-center-opportunity - Alt 1: aws-australia-20-billion-data-center-investment - Alt 2: openai-nextdc-sydney-gpu-cluster-sovereign-ai - Alt 3: microsoft-new-zealand-hyperscale-renewable-energy