AI explosion fuelling boom in huge data centre deals
Australia stands at the crossroads of a data centre boom as global tech giants and local players race to build AI infrastructure across the nation.
A global boom in data centre deals has accelerated as investors clamour for exposure to artificial intelligence infrastructure, with Macquarie landing one of the biggest buyouts on record while start-up Firmus Technologies revealed plans to build AI factories across Australia.
Macquarie struck a $US40bn ($61bn) deal to sell its Aligned Data Centres business to a consortium including Nvidia, Microsoft and Larry Fink’s BlackRock, the largest global deal on record for the booming tech sector.
The transaction was sealed with the AI Infrastructure Partnership backed by financial anchor investors including the Kuwait Investment Authority and Temasek — along with BlackRock’s Global Infrastructure Partners.
The deal will likely deliver Macquarie more than $2bn in performance fees over five years through to 2030, MST Marquee estimated.
Separately, AI infrastructure group Firmus Technologies unveiled an ambitious pact with global giant Nvidia and $17bn local player CDC Data Centres to roll out what it claims could be $73.3bn worth of huge AI data centres across Australia by 2028.
The alliance announced on Thursday included an initial $4.5bn investment for its Project Southgate, which includes building AI factories in Tasmania and Melbourne. These will be powered by 18,500 Nvidia GB300 chips that have been ordered and are expected to be online by April next year. CDC will also fit data centres in Melbourne, Sydney, Perth and Canberra with software and cooling technology developed by Firmus.
Headed by Oliver Curtis, jailed for insider trading in 2016 before a business comeback at Firmus, and co-chief executive Tim Rosenfield, Firmus claims to have developed technology that uses 33 per cent less energy and 99 per cent less water than other companies in data centres.
The booming AI sector represented a fourth industrial revolution, according to Mr Curtis.
“We’re still at the absolute beginnings here of what is something that we refer to as a fourth industrial revolution,” Mr Curtis said. “The proposition that we’ve announced today is that Australia has an opportunity, just like they did with aluminium smelters and any other metal smelter, with vast amounts of land and energy that Australia is enriched with. This is that new industry, but in today’s terms. This is a 100-year-plus industry with large scale, heavy investment required.”
Firmus had already been cashing in on the AI boom by developing a big data centre campus in Tasmania that it had initially dubbed Project Southgate, where its software and cooling technology will power, train and run AI systems.
The Australian’s Dataroom column recently revealed plans for Firmus to raise up to $1bn from investors via an initial public offering that could take place in the first half of 2026.
Its recent pre-IPO raise of $330m through Morgans and advised by Highbury Partnership valued Firmus at $1.85bn in what was one of the largest equity capital raisings this year.
Firmus describes itself as an Australian company that is a world leader in integrated, “liquid-everywhere” AI factories and the provision of Graphics Processing Units-as-a-Service to global hyperscalers and other major customers. Mr Curtis said it was imperative Australia was at the forefront of both AI and data centre investment given an international arms race underway to establish a foothold across the broader tech industry.
“We are of the belief, and it’s a belief led by Jensen [Huang, Nvidia co-founder] and many other people, that this is the beginning of a very large investment build-out,” he said. “There is going to be the haves and have-nots. Frankly speaking, the nations that have are going to prosper, and the nations that don’t unfortunately are going to be reliant on other nations that have access to material amounts of compute.”
Anthony Albanese has pledged to use his $22.7bn Future Made in Australia funding vehicle, the promise of faster approvals and generous incentives as bait to lure hundreds of billions of dollars in global investment.
CDC chief strategy officer Jack Dan said governments in Australia understood the scale of the investment prize.
“We’ve been talking about this notion of Australia as an infrastructure hub for about two years now, and I think what we’ve seen over the last six to nine months is that language being picked up and reflected by the government,” Mr Dan said. “Now we are actually starting to have a much more mature conversation about the fact that there are good parts in AI, there are bad parts in AI, but you’re never going to win unless you have a seat at the table.”
New investment among Australia’s biggest data centre operators is set to top $26bn by the end of the decade.
Australia’s data centre capacity is forecast to more than double from 1350 megawatts to 3100MW by 2030.
Big super is another racing to directly invest in data centres.
AustralianSuper has outlined a $2.2bn commitment into DataBank, forming the bulk of the US data centre operator’s fundraising. This takes AusSuper’s private investments in the sector to almost $5bn.
Meanwhile, Amazon, Google and Microsoft are betting billions of dollars that nuclear energy can help not only power the AI boom but also make it more environmentally friendly, slashing greenhouse emissions.
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