Australia Plans to Keep AI Data Centres Out of Its Suburbs

Australia’s government plans to ban new AI data centres from being built near homes and recreational facilities, and to drop a copyright plan that critics said would have let AI companies train on creators’ work without paying them. The changes are part of a wider package of AI laws, with draft bills expected out for public consultation before the end of the year.

What’s in the plan

The Australian Financial Review reported the plans on Thursday evening, citing people familiar with the policy. The government has not yet published them. According to the AFR and a summary by Capital Brief, the package would:

• Stop new AI data centres being built in suburbs, close to homes and recreational facilities.
• Require data centres to run on renewable energy, with facilities that don’t comply potentially facing power cuts.
• Make AI companies disclose the content they use to train their models.
• Replace the earlier copyright proposal with a model in which rights holders negotiate directly with AI companies, and smaller creators can still benefit when their work is used for training.

Why now

The data centre ban follows a local backlash in Sydney and Melbourne. Goodman Group dropped plans for a facility in Lane Cove in Sydney, and residents’ worries over new power lines have delayed NEXTDC’s M3 project in Melbourne, Capital Brief noted.

It also builds on what Prime Minister Anthony Albanese promised in July, when he said large new data centres would have to pay for their own power and grid connections and keep water use down, so households weren’t left with the bill. Those standards still need agreement from the states and a vote in parliament.

The copyright change is the bigger political turn. In September the ABC revealed that the government had held confidential talks on two options that would have let AI companies use copyrighted work unless creators opted out, in some cases without paying every rights holder. Independent senator David Pocock called it “throwing creatives under the bus”. Albanese had said in July that creators must keep control of their work and set the price, adding: “Anything less is theft.”

What it means

If the drafts match the reporting, Australia would be ruling out whole areas for AI data centres at a time when the biggest tech firms are spending record sums building them. Liberal frontbencher James Paterson warned in September that holding out for a better deal risks missing the investment window. Albanese has said he is confident Australia’s advantages will still bring significant investment.

For AI companies, the disclosure rule may matter most. Having to say what a model was trained on would give creators the evidence they need to ask for payment. It is the second Australian AI policy move this week, after the lower house passed a bill to stop chatbots posing as children’s best friends. Until the draft laws are out, the details reported so far could still change.