Why the Aussies are the only ones standing up to the tech giants

Within a few miles of my bayside home, Melbourne’s old industrial belt is being transformed. The tiny weatherboard cottages built for railwaymen, dockworkers and factory hands now sell for prices that would have been considered absurd just a generation ago.

Amid the rippling gentrification of the city’s western reaches, warehouses have become apartments, workshops are now cafes, and manufacturing has largely moved on. It would be easy to conclude that industry has gone for good.

But a new revolution is taking hold. Behind security fences on former industrial land, vast data centres are the factories of the new age. The product is computing power, and the rail corridors, factories and power grid that once supported a century of manufacturing are proving equally valuable to the companies building the physical backbone of AI.

For many years, the digital economy was sold as something weightless, with the comforting illusion that data lived in a “cloud” as though it existed somewhere ethereally above the sordid reality of politics and national borders. But the cloud is now among us, and it has acquired an address, utility bills, and planning permission.

Australia is among the first countries trying to govern what happens next. As the once-virtual has become intensely physical, governments are being forced to confront questions about energy, water, land use and sovereignty.

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What is happening in Melbourne’s west is being replicated across the country. More than 160 data centres already dot the landscape, mainly concentrated, for now, in Melbourne and Sydney, with nearly 100 more either planned or under construction. Amazon, Microsoft, Google, Meta and Apple, the biggest names in the global business of AI, are behind many of them.

Billions of dollars are flowing into projects designed to store, process and move the data that powers artificial intelligence. Some analysts compare the scale of investment to the mining boom. Australia is no longer merely consuming AI, it is rapidly becoming one of the places where its infrastructure is being built.

The language surrounding this transformation increasingly echoes that of an earlier era of nation-building. The impact on the country’s economy could be “more profound” than the resources boom, Andrew Charlton, the Assistant Minister for Science, Technology and the Digital Economy, s a id recently. The real question for the government, he said, was: “Do we shape the boom before it arrives or do we react after it’s here?”

The challenge outlined by prime minister Anthony Albanese in a major speech this month is not whether Australia will participate, but how and on what terms. His words drew on a familiar anxiety: that Australia will once again provide the raw materials for other countries to go ahead and capture all the profits. Australia, he said, must become more than a “data warehouse for AI products made overseas”.

“Australia has a long history of giving away its resources,” the head of the Australia Institute think tank, Richard Denniss wrote in a recent article, questioning whether Albanese’s government could be trusted to negotiate the AI landscape to the country’s advantage. “The mindset has continued and worsened. Australian politicians will frequently see foreign business interests as the answer to Australia’s problems. They will make huge concessions and come back with very little to show for what they have given away.”

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Albanese’s intervention, however, reaches beyond AI, and helps explain why Canberra has become one of the world’s most active regulators of the digital economy, from the ban on social media accounts for children younger than 16 to proposed AI standards, copyright protections and new rules governing the infrastructure that powers machine learning.

While many governments are still debating how to respond, Australia has spent years trying to determine the conditions under which technologies can operate within its borders.

Australia is well placed to benefit from the growth of artificial intelligence while being conscious of the risks that it brings. Abundant land and energy, political stability and proximity to Asian markets make it an attractive base for data centres. At the same time, citizens are a lot more comfortable than Americans, for instance, with government intervention in markets and public life. From compulsory voting and superannuation, to gun control, plain cigarette packaging and pandemic restrictions, people generally accept it when the case is made in terms of security, prosperity or the public good.

That instinct is now colliding with the AI economy. Technology is viewed as too important to be left solely to its creators and investors, beyond the reach of government. Technology is treated as another sector, like banking, mining, telecommunications and media, required to operate within a framework of rules, standards and public accountability.

Australians overwhelmingly accept that they must vote, they must save for retirement and cannot own firearms. That political culture helps explain why Canberra is moving much more aggressively than many of its peers to shape the AI age.

The same instinct was visible in 2025’s decision to introduce a mandatory minimum age of 16 for social media accounts. The move attracted global attention – and fierce criticism from the tech companies. To supporters, the policy reflected growing concerns about the social costs of unregulated digital access. Critics argued the government was venturing into areas better left to parents and markets.