- Australia is Telstra’s pick for Asia-Pacific’s trusted AI hub, thanks to strong power, chipset and connectivity prospects
- Operational data center capacity there is set to jump from 1.6 GW to 3.9 GW by 2030
- Telstra’s Aura Network is 60%+ built, but the real test comes after 2030
Singapore. South Korea. Malaysia. Thailand. These are among the rapidly growing data center hubs taking root in the Asia-Pacific region as AI demands more compute. And yet it is Australia that Melbourne-based Telstra sees emerging as a focal point in the coming years.
Telstra International CEO and Telstra Digital Infrastructure CRO Roary Stasko told Fierce it’s all about the right conditions and the right equipment.
“I think of it from power, I think of it from chipsets and I think of it from connectivity,” Stakso said. All three of those things are inputs for data centers, and Australia is “well positioned” across them all.
Today, Australia has around 1.6 gigawatts (GW) of operational data center capacity. That capacity is expected to more than double to 3.9 GW by 2030, according to data from DC Byte and Data Centers Australia. But Australia’s full long-term pipeline is much, much larger, standing at 26.8 GW.
On the power front, Stasko noted Australia is a global leader in solar and wind power generation, leaving it in good position to meet rising data center power demands even as power becomes a key constraint elsewhere. The trick, according to the Smart Energy Council, will be timing new renewable deployments to data center builds so consumers in Australia aren’t hit with higher energy builds.
Then there are the chips (GPUs, CPUs, etc.) that run AI workloads. There’s a whole geopolitical storm happening as the U.S. and China battle for dominance in the AI market, but there are two things you need to know: the U.S. has banned exports of certain chips to China, and Chinese companies like Huawei are looking to sell their chips outside the mainland.
Speaking about how he expects Australia’s role in the Asia-Pacific digital ecosystem to evolve, Stasko said Australia “is a market where the U.S. has been more comfortable with chipsets being exported. I don’t know that that stays the same for all countries over time.”
He added that while Malaysia is emerging as a destination for Chinese chipsets, Australia has already classified Huawei as a high-risk vendor (at least as far as 5G networks are concerned).
“In terms of what develops in Australia, I do expect it’ll have a more Western bend in terms of the data centers, the AI models and the labs that will come out,” Stasko said.
Then there’s the connectivity element, which spans both terrestrial and subsea needs.
“What Telstra has done ahead of the market slightly in terms of building our fiber network will provide connectivity to this initial wave of data center capacity that’s forecasted,” Stasko said. “On the subsea side, there are projects underway and that will continue to grow.”
He continued: “What worries me is not the 2030 horizon, it’s probably 2035 and 2040 because these are projects that take years to come into the making in terms of building new subsea cables or building new fiber projects.”
Building for the AI moment
Telstra has spent the past several years building toward rising demand with its Aura Network project, a billion-plus-dollar initiative aimed at deploying 14,000 kilometers (about 8,700 miles) of fiber across Australia.
Stasko said the company is a little bit more than 60% of the way through that project now, adding it is already seeing “demand for data centers come through.”
It’s initial tranche of routes focused on areas where both demand and ROI were clear. Now, it’s turning its attention to a second tranche where there’s a bit less clarity, but Stasko said as demand has continued to increase, so has Telstra’s confidence.
However, it’s not just terrestrial fiber that is required. More subsea cables to connect Australia to other parts of the world – including regional cables to Asia-Pacific countries and trans-Pacific cables to the U.S. – are also needed.
The problem is subsea cable systems are multi-year, multi-billion-dollar projects (commonly undertaken by hyperscale cloud companies either alone or with partners) and not every cable deployed offers capacity to the broader market.
“I think the question will really be where hyperscalers are building or taking the lead, how much are they going to offload,” Stasko said. “We’ll certainly partner where we can and participate to take their offload and serve that back into the broader market, but short of that we’ll need additional systems that serve not just a single tenant.”
One advantage Australia has as it races to get fiber in the ground and sea is that much of it is a greenfield market. Ultimately, Stasko said he expects the country will see more innovation in where and how connectivity is built. No word yet, though, on what exactly that might look like.
Read more about data centers on Fierce Network:
Lumen wants to use the network to help AI workloads chase power
Gartner warns AI data center capex is ‘unsustainable’ as $3.5T write-down risk looms
AI data centers could unlock more compute without more power
AI boom through 2050 hinges on power supply, politics, PwC says