01 September 2026

Submission to the inquiry into artificial intelligence and data centres

Since the beginning of the decade, AI has embedded itself in almost every sector of our economy. If Australia wants to make the most of this opportunity, developing sovereign AI capability should be designated as a national priority.

Read the submission

The development of sovereign AI capability is of crucial importance, as well as a careful assessment of the benefits and costs associated with the development of data centres.

ATSE's response to the Senate Environment and Communications References Committee inquiry into artificial intelligence and data centres focused on the technological, infrastructure, environmental and capability dimensions that need to be considered in relation to AI and data centres, including ramifications for energy, water, and sovereign AI capability.

Artificial intelligence and data centres present a series of opportunities and challenges for Australia. Since the beginning of the decade, AI has embedded itself in almost every sector of our economy. However, Australia faces significant global competition from the select few countries leading in AI development. If Australia wants to make the most of this opportunity, developing sovereign AI capability should be designated as a national priority. This is outlined in ATSE’s 2025 action statement Made in Australia: Our AI opportunity.

Recommendations

  • Recommendation 1: Invest in sovereign AI capability, including Australian-owned and managed AI infrastructure, models and datasets.
  • Recommendation 2: Require new data centres to underwrite additional renewable electricity generation and storage capacity, to support increased electricity demand and accelerate the deployment of renewable energy.
  • Recommendation 3: Extend energy performance reporting requirements beyond government data centres by mandating the public disclosure of key metrics, including Power Usage Effectiveness (PUE), for large data centres across Australia.
  • Recommendation 4: Develop a national water reporting framework for data centres that requires consistent disclosure of both direct water consumption and indirect water use associated with electricity generation.
    • A study in 2023 found that in 16 of 26 OECD countries examined, more than 60% of the water associated with data centre usage was attributed to energy generation rather than cooling.
  • Recommendation 5: Support industry-research partnerships to accelerate the development and deployment of next-generation energy-efficient computing technologies such as quantum computing.
  • Recommendation 6: Incorporate data centre workforce needs into national skills and infrastructure workforce planning.

 

Screenshot 2025 12 01 At 1.29.38 Pm
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AUG
2025
Made in Australia: Our AI opportunity

Artificial intelligence is radically reshaping work, education and security in Australia, and is officially recognised as a critical technology in government policy. How we harness it will impact the nation’s economic prosperity, national security and continuing innovation.

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