South Australian government push for ‘hyperscale’ data centres to power AI revolution

Both Labor and the Liberals agree there are big opportunities in these factory-sized AI projects – but they come with some serious electricity demands.

Plans to lure “hyperscale” data centres to regional South Australia to power global artificial intelligence tools and other computing networks are being pursued by the state government.

Factory-size centres consuming up to one gigawatt of electricity would be powered by renewable energy – requiring about 300 wind turbines or 1.8m small solar panels.

Under the government’s ambition, smaller data centres would be built in Adelaide, capitalising on a global boom fuelling an AI revolution, spearheaded by models like ChatGPT, Claude and Google Gemini.

In an interview with The Advertiser, Artificial Intelligence and Digital Economy Assistant Minister Michael Brown said the government also was examining AI to drive productivity across the public sector.

An xAI data centre in Memphis, Tennessee, pictured in May. (AP Photo/George Walker IV)

Two technicians wearing PPE walking past racks of equipment in a data centre for cryptocurrency mining, cloud services and AI computing in a large, temperature controlled warehouse in a remote location in Stutsman County, North Dakota.

This included developing and trialling secure voice transcription tools for doctors and police, plus an AI tool to slash planning assessment times from up to a fortnight to just minutes.

“The Premier and I share the ambition to see hyperscale data centres (in regions) and other data centres in Adelaide,” he said.

“We feel that there’s a real opportunity with our strengths in renewable energies in particular, to look at potential regional areas for locations of very hyperscale data centres.”

But Opposition Leader Vincent Tarzia said AI data centres required huge amounts of electricity and “Labor’s failure on energy policy has culminated in record power prices that has put us on the back foot in realising the full potential of AI”.

Premier Peter Malinauskas told an AmCham lunch in May that the “global capital racing around at the moment looking to invest in data centres is eye-watering” and, although most would go the United States, investors were looking for access to decarbonised energy elsewhere.

Asked whether the government was in talks with potential investors, Mr Brown said there had been “a number of discussions with people in the space” and argued there was “a lot of interest in our state, particularly because of our strength in renewables”.

Mr Brown said voice transcription could boost efficiency “so that doctors can spend their time treating patients and police officers can spend their time investigating crime rather than having to produce reports”.

The June 5 state budget allocated $28m over four years to establish a program to grow the use of AI applications across the public sector.

Metro Homes and the Hickinbotham Group are participating in a trial that is expected to expand to other larger SA builders, ahead of full industry and market adoption by December.

Mr Tarzia said he had recently met with “a number” of US tech companies to discuss AI opportunities, vowing to present “a future-focused policy agenda” for next March’s state election that positioned the state as a national leader “in responsible, real-world AI adoption, that boosts our economy, creates jobs and modernises government services”.

Originally published as South Australian government push for ‘hyperscale’ data centres to power AI revolution