OpenAI has partnered with Australian data center operator NextDC Ltd to build a A$7 billion (US$4.6 billion) large-scale computing cluster in Sydney, accelerating its expansion in the Asia-Pacific (APAC) region.
The new data center is part of a broader artificial intelligence (AI) infrastructure partnership between the two companies, NextDC said yesterday.
NextDC’s stock price yesterday soared as much as 11 percent.
Photo: Reuters
The project, slated to get up and running by the second half of 2027, comes as OpenAI is launching its first office in Australia and the country pushes forward with its sovereign AI efforts.
OpenAI chief executive officer Sam Altman is broadening the San Francisco-based firm’s reach, targeting companies and governments across the planet as its rivalry with Alphabet Inc’s Google, Meta Platforms Inc and others intensifies.
Australia is emerging as a regional hot spot for data centers, attracting investment alongside the growing adoption of AI services.
“The momentum that Australia has when it comes to AI” drove the firm’s investment decision, OpenAI chief strategy officer Jason Kwon told reporters in Sydney.
The center would have “some of the most sophisticated architecture and infrastructure for AI models in all the APAC region,” he said.
Shares of NextDC closed 3.1 percent higher in Sydney trading, valuing it at about A$9 billion.
OpenAI and NextDC are to collaborate on the planning, development and operation of a “next-generation hyperscale AI campus and large-scale GPU supercluster” in Sydney’s Eastern Creek, about 45km west of the city center. The facility would serve OpenAI clients including Commonwealth Bank of Australia, Wesfarmers Ltd, Canva and Virgin Australia.
The Australian government welcomed the project, which is expected to create thousands of direct and indirect jobs while it is being developed, as well as ongoing technical, manufacturing, engineering and operational roles.
The data center “will demonstrate that Australia can be a leader in digital infrastructure and artificial intelligence,” NextDC chief executive officer Craig Scroggie said.
Australia is drawing AI investment from other global contenders. Blackstone Inc bought Sydney-based data center operator AirTrunk for A$24 billion last year, Amazon.com Inc has announced plans to invest A$20 billion to expand its Australian infrastructure by 2029 and Microsoft Corp in 2023 said it plans to invest A$5 billion to expand its data center portfolio in the country.
The country’s deployable capacity is to more than double to 3.1 gigawatts by 2030 from 1.35 gigawatts last year, consultancy Mandala said, estimating additional investment of more than A$26 billion over the period.
The Australian government this month released a framework for a national AI roadmap — boosting investment, expanding infrastructure and skills, and embedding AI across public services.
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