(Bloomberg) — OpenAI partnered with Australian data center operator NextDC Ltd. to build a A$7 billion ($4.6 billion) large-scale computing cluster in Sydney, accelerating its expansion in the Asia-Pacific region.
The new data center is part of a broader AI infrastructure partnership between the two companies, NextDC said Friday, sending its stock soaring as much as 11%. 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 artificial intelligence efforts.
Chief Executive Officer Sam Altman is broadening San Francisco-based OpenAI’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 OpenAI’s investment decision, Jason Kwon, its chief strategy officer, told reporters in Sydney. The center will have “some of the most sophisticated architecture and infrastructure for AI models in all the APAC region.”
Shares of NextDC closed 3.1% higher in Sydney trading, valuing it at roughly A$9 billion.
OpenAI and NextDC will 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 45 kilometers (28 miles) west of the city center. The facility will serve OpenAI clients including Commonwealth Bank of Australia, Wesfarmers Ltd., Canva and Virgin Australia.
The government welcomed the project, which is expected to create thousands of direct and indirect jobs while it’s 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 CEO 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 set to more than double to 3.1 gigawatts by 2030 from 1.35 gigawatts in 2024, economics consultancy Mandala forecasts, estimating an additional investment of more than A$26 billion over the period.
Australia’s government this month released a framework for a national AI roadmap — boosting investment, expanding infrastructure and skills, and embedding AI across public services. The policy is expected to drive growth in not just the tech sector but also in areas such as renewable energy.
