Question 1

How fast is the Australian data centre market expanding?

Accepted Answer

The industry is projected to grow revenue at a 19.9% CAGR through FY28, building on a $2.5bn revenue base established in FY23. Total built volume will expand even faster at a 26.3% CAGR, driven primarily by massive hyperscale investment.

Question 2

What are the primary risks to local industry profitability?

Accepted Answer

Rising power prices and construction costs are creating significant headwinds that will likely stabilise capacity pricing. These cost pressures challenge the industry's ability to meet a demand profile where hyperscale alone accounts for 60% of total volume.

Question 3

Will Australia become a global hub for AI processing?

Accepted Answer

Australia faces a significant strategic bottleneck as NVIDIA controls 82% of the GPU market, keeping high-end AI computation concentrated in the US. The scale disparity is stark: Microsoft’s proposed 5GW AI data centre in the US is 50% larger than the entire projected Australian industry capacity for FY28.

Question 4

Where is the physical infrastructure being concentrated?

Accepted Answer

Investment remains highly centralised in Tier 1 markets to leverage existing connectivity. Sydney and Melbourne currently command over 80% of total Australian capacity, a dominance that shows no signs of diluting despite rising regional demand.

Data centre industry facing cost pressure

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