KEY POINTS
- OpenAI announces a $7 billion AUS partnership with NEXTDC to build a hyperscale AI campus in Sydney, Australia.
- The project marks OpenAI's first initiative in the Asia-Pacific region under its "OpenAI for Countries" program.
- Concerns over energy consumption and environmental impact mirror challenges seen in the U.S. data center boom.
Here’s something to keep an eye on.
Data centers have been a dominant force in U.S. construction this year, and now it appears to be Australia’s turn. OpenAI has announced a $7 billion AUS (~$4.6 billion US) partnership to place a “hyperscale AI campus and large-scale GPU supercluster” in Sydney, New South Wales.
Dubbed “OpenAI for Australia,” the project is a part of the company’s “OpenAI for Countries” initiative, designed to bring advanced AI capabilities around the world. This would not only be OpenAI’s first foray into Australia, but its first in the Asia-Pacific Region, as well.
Who is OpenAI partnering with in Australia?
In its December 5 announcement, OpenAI says it will work with local partners “to support sovereign AI infrastructure, upskill Australians, and accelerate Australia’s thriving local AI ecosystem.”
NEXTDC is the Australian-based infrastructure partner chosen by OpenAI. It goes into more detail about the campus, highlighting that it will provide secure support for financial, government, defense, education, healthcare, and research work.
How does this compare to what’s happening with U.S. data center construction?
Economic trend watchers already know the big business data centers and AI infrastructure have become in America. According to ConstructConnect’s December 2025 Data Center Report, data center construction starts reached $10.8 billion in October, a 272% jump from the same time last year.
With OpenAI coming to town in Australia, the same concerns many in the U.S. have are being reflected Down Under, including environmental impacts and energy consumption. Days before OpenAI’s December 5 announcement, the Australian Financial Review cited a report that the growing number of data centers in the state of New South Wales would require enough energy to power the equivalent of more than 1 million homes. Again, this was before the announcement of OpenAI and NEXTDC’s partnership in Sydney, the state’s capital city.
A November 2025 report from the Australian Energy Market Operator (AEMO), the federal utility manager, forecasts data centers to demand up to 10% of the country’s power supply by 2035.
What’s Next for “Open AI for Australia”?
Another growing concern is over OpenAI’s financial viability. A recent report from HSBC’s Global Investment Research, shared with many outlets, says the company would need to fill a $207 billion gap in funding by 2030 to keep operating at scale. However, the report also forecasts nearly half the world’s population over age 15 would be using OpenAI’s services by the same year.
Despite any concerns, data center projects and construction continue to grow massively. The U.S. is seeing it happen in real-time, and it appears Australia is ready to join the party. A 2025 report from Australia’s Department of Industry, Science and Resources says the country is ready.
“Unlike global trends emphasising pure software or consumer technology disruption, Australia’s AI ecosystem has a more evolutionary approach that enhances and extends existing economic strengths,” the report states.
We’ll find out more in the back half of 2027, when NEXTDC says the first phase of its OpenAI-partnered project is expected to be delivered.
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