“If the US wants to continue to dominate, it’s going to need some kind of overflow option,” Cohen told a recent summit on US-Australia investment hosted by the Australian Consulate-General in New York. “It’s hard to imagine a better overflow option than a country like Australia.”
However, other speakers warned there were potential roadblocks to Australia realising its share of the US data centre boom. Ryan Brown, head of infrastructure finance at OpenAI, which created ChatGPT, said restrictive copyright and data privacy laws meant companies were likely to look elsewhere in a competitive market.
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Unlike the US, Australia does not have a broad “fair use” doctrine, although there are specific purposes carved out under which material can be used or reproduced without infringing copyright.
“There’s also changes with respect to the regulatory framework and legislative front on data privacy and misuse … it’s not entirely clear to us what misuse is, and how that’s categorised, and what requirements are attached to that,” Brown said. “I love Australia, but that creates uncertainty as we try to make capital allocation decisions.”
This was an urgent issue because much of the large infrastructure investment for AI was going to be made in the next three years, Brown told the summit. He did not respond to an email request to elaborate.
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Others, however, reported positive experiences building data centres in Australia. Matthew A’Hearn, head of digital infrastructure at Blue Owl Capital, said his firm had invested in a $2 billion data centre in Melbourne, which was “able to be brought to bear in a short time frame”.
Meghan O’Sullivan, a professor at Harvard University’s Kennedy School and former adviser to former president George W. Bush, warned that Australia’s privileged Tier 1 position could be diluted if the Trump administration decided to use top-tier status as a bargaining chip in transactional deals with other nations. That could lead to many more countries being given access to US technology, O’Sullivan said, making for more competitors. “The Middle East, for instance, may well be a competitor to Australia in this regard.”
Cohen agreed nations such as Saudi Arabia, Qatar and the United Arab Emirates,“the geopolitical swing states of the Middle East” that were not historically a major part of the global technology conversation, were now “experiencing once-in-a-generation political mobility” as a result of artificial intelligence growth.
“This is a big competition that’s going to play out over the next decade,” he said. “I think Australia ends up getting a huge geopolitical boost from the US’s own limits in terms of the AI infrastructure that it can build.”
While Australia was well-placed to reap those spoils, “we need data centre diplomacy to make this happen,” Cohen said. “Data might be the new oil, but if AI software needs to run on AI hardware, then it’s nations, not nature that will decide where to build those data centres.”
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