Australia | 11:00 AM
Australia's safe and stable backdrop makes it a target for data centre development in the Asia Pacific region, as the positive news keeps rolling on.
-Good news continues to flow for data centre infrastructure
-Hyperscalers continue to invest for AI growth
-NextDC, Goodman Group & DigiCo REIT in focus
By Danielle Ecuyer
The GenAI trade is back, after a wobble at the start of 2025
"The reports of my death are greatly exaggerated."
(attributed to Mark Twain).
Today'sopening statement might aswell be applied to the GenAI trade and ancillary beneficiaries such as data centres and digital infrastructure.
Wilsons is the latest researcher to shine a light on the mega trend of "Gen(erational) AI thematics" with a very playful title.
In addressing the sell-off in AI-related stocks during the first quarter of 2025,Wilsons echoessimilar views to other commentators and experts the arrival of DeepSeek will not alter the AI demand for data centres over the longer term. Equally, Microsoft's decision to cancel 2GW of data centre projects relates in large part to the shifting dynamics of the company's relationship with OpenAI.
While Microsoft's OpenAI requirements were lowered, hence the cancellations, Oracle's rose as the work was transferred to other hyperscalers.
The most recent US earnings season also re-inforced the investment plans for hyperscalers with Microsoft confirming capex of over -US$80bn, Alphabet at -US$75bn, and Amazon at -US$100bn with Meta lifting capex guidance to -US$64bn-US$72bn from -US$60bn-US$65bn underpinned by data centre spending.
These issues were also detailed in FNArena's recent update on data centres:https://fnarena.com/index.php/2025/06/19/fnarena-visits-nextdcs-s3-data-centre/
Driving demand Downunder
Three drivers are underpinning demand for digital infrastructure, such as data centres, notably the ongoing shift to cloud computing, the ongoing development and acceleration in GenAI, and the expanding rise in data generation which includes the Internet-of-Things (IoT), Software-as-a-Service (SaaS) adoption, edge computing for the likes of autonomous vehicles, and video streaming.
At Morgan Stanley's 7th Australian Investment Summit, one of the key themes for attendees and participants was AI Tech Diffusion. The broker emphasised Australia is continuing to experience "exponential growth in data centre demand".
By way of context, Australia ranks seventh globally in terms of the number of data centres, behind global leaders the US, Germany, the UK and China, and only just behind Canada and France, with more than 300 data centres at the start of 2024. The Netherlands, Russia and Japan complete the global top ten.
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