Anthropic Eyed 5GW of AI Data Centers in Australia: Could the Grid Handle It?

Anthropic, a prominent AI company, has reportedly shown interest in expanding its AI data center capacity in Australia, potentially reaching up to 5 gigawatts (GW) in New South Wales, according to internal government emails obtained by ABC News. This would be more than three times the combined capacity of all Australian data centers, highlighting the rapid growth of AI infrastructure demand.

For Australian IT leaders, this illustrates how AI infrastructure could reshape the landscape of computing capacity, power sources, and enterprise costs. While Anthropic's CEO, Dario Amodei, and other executives visited Australia after the emails were sent, the company has not confirmed plans to build 5GW in New South Wales. The figure provides context for Australia's broader push for greater control over AI infrastructure, as policymakers are concerned about becoming a buyer of AI services developed overseas rather than capturing more economic value locally.

Hosting more AI infrastructure could help change this equation, but it also poses challenges in finding enough electricity to power these facilities. Australia's energy system is already preparing for increased data center demand, with the Australian Energy Market Operator estimating data centers' electricity consumption could rise from 4 terawatt-hours in 2025 to 12 TWh by 2029-30, representing 6% of total demand.

The government has agreed to develop nationally consistent mandatory standards to address the energy, water, and land-use impacts of large data centers, which will be legislated by early 2027. These standards will require large data centers to underwrite new electricity supply, pay for grid connections, reduce power consumption, and meet water-efficiency requirements.

The political details surrounding these standards are still being negotiated. For CIOs and infrastructure teams, the potential 5GW AI buildout could influence decisions far removed from electricity policy. More domestic AI capacity could improve access to computing resources, reduce dependence on overseas infrastructure, and make Australia more attractive for workloads that benefit from local hosting.

However, physical proximity does not guarantee abundant or inexpensive compute, and capacity constraints could still affect the availability and pricing of AI services.