Australia sets rules for AI data centers amid concerns over environmental impact

And together they defined the spirit of a nation. Announcement about how Australia was going to seize the opportunity but deal with the challenges and risks of AI. And it could be best summarized as almost a that we're rolling out the red carpet for AI companies to come here. But we've got a bouncer. We're setting some kind of rules around what we want here and why we will welcome them in. And that was specifically around the idea that you know these companies are going to bring a lot of foreign investment. The technology is likely to be you know crucially important to industry of the future. But you know, the government is very aware of the growing uh community sentiment around um uncomfort about some of the data centers that are popping up to uh power this generative AI boom. And so as a result, you know the Prime Minister said uh to have social license to allow these data centers to be built here, um, we've got to set minimum standards at a national level around things like uh power use, energy use, and even where they're situated. Okay, now since that announcement, Kent, we've learned a bit more about its implementation from the Prime Minister. What did he say? Yeah, so I mean, obviously, these um new rules are when he announced them, he said, you know, we're going to uh have to figure them out, we're gonna have to hash some stuff out with the states as well because um you know many of these issues are not just purely federal but also involve the states as well. Um, and so subsequent to that, he said that these rules will not be retrospective, meaning that they won't apply to data centers that already exist, but also ones that are being built uh right now. Um, and so ABC analysis based on looking at um state planning documents uh and also company announcements shows that there are at least 25 new data center projects that will escape these rules, even though many of them will not be built for potentially years. Now, some of these may not end up being built, and and no doubt there'll be more as well approved before these new rules come into place. But what's important about this is that these new data centers are this kind of new generation that are bigger, consume more resources than the ones before it because this generative AI boom, you know, the things powering chat GPT, the kind of AI answers now that you get when you search something in Google, they require a lot more computing power than traditional uh uh computing other methods. And so as a result, you know, um we have to build up this infrastructure, these products have been hugely successful and very, very uh, you know, widely used, but also it means that we've got to build these data centers out, and we know that um there's this kind of rush at the moment to get uh new approvals through to build them out, meaning that these new rules that the government says is important for communities to feel comfortable about them built being built, won't apply to them. Yeah, so then what does this exemption from the new rules mean for these communities that have these new projects already going ahead? Yeah, so I mean, look, um it should be clear that even though these national rules aren't already in effect, there still are state planning rules, and um, you know, many people might compare this to the US, which has um kind of significantly um more data centers already and kind of more ones being built, and they tend to be bigger. Australia is not quite there yet, although these new ones that are being proposed, have been approved, are currently being built, are significantly bigger. They still are subject to state planning rules, but the federal government is like, you know, these federal rules will kind of set more minimum standards that we think are necessary for for communities to feel good about it. And so I spoke to you know, people who are um have data centers being built near them, and they um, you know, including some people who are opposing them, and they said, Well, look, you know, I'm I'm I actually don't want it built here, but if it is going to be built here, I'd like it to have you know certain um minimum standards around things like water use. I want to see them use less water. And so, you know, they were saying that they wished that these federal government rules were already in place, um, but but obviously they are not yet. Um so is the uncertainty over these rules affecting investment in Australia's data centers? Well, I mean, an analyst I spoke to uh suggests that uh there is plenty of demand. We are seeing this enormous um uh interest and appetite to build data centres in Australia. Um, you know, certainly if it is dampening interest at all, uh it hasn't counteracted the the this great um appetite for them. Um, you know, I think Westpac said there's about 150 billion dollars worth of data centre projects in the pipeline. Um, the analyst I spoke to said that like there's a lot of interest. Australia is a very attractive place for this, and that this, you know, if we build them here, there'll be a lot of benefit for the um Australian economy. Um so we're definitely seeing it happen. I think the just really fascinating thing is that these data centres are being built, it is going ahead at such a pace that is outpacing the federal government's attempt to set rules around them. Cam Wilson, thank you very much. Thank you.