Amazon has committed to spending AUD$ 20 billion ( US$ 13 billion ) on data centre infrastructure in Australia over the next four years. The expense is the largest tech determination of its kind ever officially announced in the country.
To match the power requirements of its expanding system, Amazon plans to develop three renewable projects in Victoria and Queensland with a combined power of more than 170 MW. The tasks will become operated by Danish clean energy company Western Energy.
The growth is intended to support surging desire for artificial intelligence and cloud computing services in Australia. Analysts predict that automation technologies will contribute up to AU$ 600 billion annually to Australia’s GDP by 2030, while cloud computing will contribute AU$ 81billion between 2024 and 2029.
The move follows a similar US$ 20 billion funding Amazon announced in Pennsylvania last week, as part of its international drive to scale up AI-ready system. This contrasts with rival companies that have paused or scaled back their data center ideas amid tax confusion and rising equipment costs. For instance, tariffs proposed by US President Donald Trump could pull up technology costs worldwide and soften Artificial demand, Jeff Bezos’ organization continues to build.
Amazon wants Australia to appreciate its development potential
Amazon says that its data centre investments may drive development by placing AI and sky functions in the arms of Australian businesses, allowing them to modernise, increase efficiency, and scale up while meeting native data citizenship and regulatory requirements. It will also continue to support AI and digital skills education programs, so that businesses can reap the benefits of the technology and individuals are qualified for the new jobs it will create.
Despite strong global competitiveness rankings, Australia has struggled with low entrepreneurship rates, ranking third from the bottom out of 64 countries for entrepreneurship in 2023. Analysts said the underlying reason for this was the lack of economic complexity; the number and complexity of products exported were simply not up to world standards. Amazon may hope to be the tech giant to help the country realise its potential.
More data centres could boost Amazon’s market dominance and raise energy prices
However, not everyone may welcome Amazon’s growing entrenchment in Australia’s cloud and AI sectors. A 2023 Senate inquiry heard evidence that Amazon Web Services ’ dominant market position made it difficult for smaller businesses to negotiate fair contract terms and pricing. It also enabled the company to issue complex contracts and billing structures that obscure usage and switching costs.
AWS denied this, arguing it has numerous competitors, but faces similar accusations in the UK. Cian Byrne, a CTO and software developer who provided evidence to the inquiry, described the Amazon announcement as “bittersweet. ”
“ From a personal view and perspective, the cloud is too expensive for what you get in certain use-cases, ” he wrote on Linked In. “I’ve seen business(es ) disappear because of their cloud bills. ”
There are also concerns about the additional pressure the new data centres will put on Australia’s energy supply, potentially causing prices to skyrocket. Last year, investment bank UBS predicted that evening peak demand could drive wholesale power price spreads up to 70 % higher by 2030, according to The Guardian.
Outages could become a problem, too, with the Australian Energy Market Commission considering new rules to ensure grid stability amid surging AI-driven energy consumption. Amazon is taking steps to prevent this outcome by constructing solar farms that can support its new infrastructure.
To help offset its impact, Amazon says it is scaling up its renewable portfolio. With eight existing solar and wind projects already operating across New South Wales, Queensland, and Victoria, the addition of three new solar farms is expected to raise the company ’s total renewable output in Australia to more than 1. 4 million megawatt hours annually — enough to power approximately 290,000 homes.
AWS CEO Matt Garman said in a statement: “We’re proud to be expanding our world-class data center infrastructure, bringing more renewable energy projects online, and supporting the country ’s vision to be a global AI leader. AI is a once-in-a-generation transformation, and Amazon is pleased to be empowering all Australians to innovate at scale through this investment. ”
Read our coverage of Amazon’s$ 20 billion data center expansion in Pennsylvania to learn more about its global AI infrastructure strategy.
