A New South Wales parliamentary inquiry revealed that the state lacks a unified strategy to assess the cumulative infrastructure strain of rapidly expanding data facilities. Rather than halting development, the committee recommended drafting a comprehensive sector strategy to better coordinate approvals. Committee chair Abigail Boyd dissented, arguing that governments are succumbing to an artificial intelligence boom that threatens resource security. The decision directly impacts prominent developers like NextDC and OpenAI as they await facility approvals amid mounting community resistance.
Key points
Existing approval processes in New South Wales fail to evaluate the cumulative impact of…: Existing approval processes in New South Wales fail to evaluate the cumulative impact of data facilities on power and water grids.
Major artificial intelligence developers including OpenAI and NextDC remain positioned to…: Major artificial intelligence developers including OpenAI and NextDC remain positioned to advance projects while awaiting pending facility approvals.
The committee prioritised creating a comprehensive infrastructure management strategy rat…: The committee prioritised creating a comprehensive infrastructure management strategy rather than pausing new technology development projects.
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SYDNEY, Nov 5 : An inquiry into data centres by Australia's most populous state found approvals failed to consider the cumulative effect on resources and infrastructure but stopped short of calling for a moratorium, prompting a blistering rebuke from its chair.
The report by the New South Wales cross-party inquiry reflects a growing tension facing lawmakers globally as they navigate an AI-led buildout that McKinsey estimates will be worth $7 trillion by 2030: they want to benefit from the boom but communities are putting up increasingly robust resistance.
The tension is especially strong in New South Wales, of which Sydney is the capital, where developer NextDC and ChatGPT owner OpenAI are awaiting approval for a data centre. There is a state election next March, and already residents in one suburb prompted a smaller project to be withdrawn.
The report found the state lacked a coherent strategy to manage the data centre boom's impact on water, electricity and infrastructure. It warned current guidelines may underestimate future power demand and water supply limits, and that "clustering" facilities could create infrastructure pressures.
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