Blanket bans on AI could cause 'data centre panic'

One-size-fits-all bans on how artificial intelligence data centres operate could prompt investment migration overseas, according to business groups. The Australian Chamber of Commerce and Industry warned in a Senate inquiry submission that a neutral approach is necessary to attract investment to the energy-intensive hubs. Australia needs a data centre strategy, not a panic, the submission stated.

Blanket restrictions, moratoriums, or identical rules would drive investment abroad without resolving energy, water, or planning issues. The right course of action is a positive attitude to position Australia among the leading tech countries. The submission followed Prime Minister Anthony Albanese's plans for AI data centres to generate their own renewable energy as the technology's use expands.

The proposal faced resistance from Queensland and the Northern Territory, which advocated for coal and gas-powered data centres in their regions. A national cabinet meeting in August seemed to endorse exemptions for Queensland and the NT to avoid using renewables, though Energy Minister Chris Bowen denied such measures were approved.

The Chamber's submission noted that the states and territories' energy profiles need to be acknowledged. ACCI supports source-neutral energy decisions across the economy, recognizing that a diverse energy mix ultimately benefits businesses and consumers. The business peak body stated that Australia is poised for world-class domestic investment in the sector with the right settings.

Australia should embrace the substantial investment, productivity gains, jobs, and national capabilities that data centres bring to the economy, the submission emphasized. A Treasury brief to Treasurer Jim Chalmers indicated that AI could deliver productivity gains of 1.2 percent per year by 2030 in both public and private sectors.

Treasury also highlighted AI's potential to disrupt high-skilled, non-routine, and cognitive jobs in unprecedented ways, compared to previous technological advancements. Treasury Director Jim Chalmers expressed optimism that the government could harness the economic upside and mitigate risks through concerted effort. Small Business Council of Australia CEO Skye Cappuccio cautioned that smaller companies might be left behind in the AI race.

Small businesses cannot be expected to undergo the same transition or pace without initial assistance to adapt, she said.