The Great AI Gamble: How Investors And Telcos Must Manage AI Capacity Uncertainty

Australia's formal AEMO data centre pipeline totals 5.4 GW in grid connection applications. The IEA simultaneously says that energy per Al task is falling at least an order of magnitude annually. Those two facts imply that the pipeline is overbuilt. We think that reading is too quick. The same IEA dataset records total data centre electricity consumption rising 17% in 2025 and Al-focused consumption surging 50% during the period of order-of-magnitude per-task efficiency gains. That is the signature of a rebound effect, and it is the reason William Stanley Jevons' 1865 observation about coal remains the single most important idea in this market. This report investigates the tension between falling unit costs and rising volumes, and argues that the honest conclusion is not that Australian Al power demand is overestimated, but that the credible range around it is far wider than either the bull or bear case admits. That width, not the midpoint, is what should drive capital allocation.