By Alicia Lucas
Despite increasing widespread and bi-partisan protest in the USA by urban and rural communities including the use of such methods as moratoriums by local (county and city) government to allow some time for better consideration of the imposition of large or hyperscale data centres, Australian governments and governments of other countries in our region seemingly proclaim how important they are to have USA data centre investment. There is even jostling to have the most or biggest data centres.
Australia’s inflexible position on models labelled “artificial intelligence” and data centres, despite the increasing visibility of potential harms, is shown by the response of the federal government’s Minister for Industry and Innovation, Tim Ayres, to a question by Senator David Pocock about data centres and the loss of income tax due to loss of jobs from “AI” on the 12/5/2026 where the Minister pointed to the government’s aim to not only “capture that [“AI”] opportunity for Australians but to spread it right throughout the whole economy.” The minister envelops this in Australia having control of its own destiny, its own sovereignty, and says the government is trying to have “much of the technology stack here in Australia.”
It is unclear what the government plans in regards to the technology stack, that is, the hardware and software used to run a large “AI”-labelled model including the data centre and its innards, servers and chips, and cloud and model software when the Prime Minister has again announced a USA company, Microsoft’s, decision to invest in large data centres in Australia. Using data centres produced by overseas companies combined with a relationship with US company Anthropic seems to leave little room for the Australian government to do other than make minor adjustments to blunt some of the more adverse aspects of digital-related problems while leaving the basic USA “AI”- labelled model structure in place.
The under 16 years old social media ban is an example of a minor change made by government that does not appear to have modified the structure of social media and one that may also smooth the way for other problems to develop. In this case, potentially improved accuracy in capturing children’s data (those 16 years and over) and approving of and normalising the sharing of identifying information with overseas companies. In contrast, the European Union is moving to digitally decouple itself from other countries to protect it, its private companies and its citizen’s autonomy and security.
Changing World – Looking after themselves – European Union
Decoupling does not necessarily mean isolation from the world as non-commercial digital standards exist to allow different systems to work together to, for example, enable a document from one system to be readable in another. The EU focus is particularly on government agencies and information. Decoupling does mean moving away from using other countries products such as the Microsoft Windows operating system or data centre infrastructure. This decoupling is already in progress.
The European Union recognises security, including economic security problems, not just data privacy problems. Its industry shares economic concerns. Data centres are a particular issue as USA companies such as Microsoft, Amazon and Google own most of the larger data centres around the world including in Europe. Microsoft and Amazon and Google Cloud offer “sovereign” versions of data centres but these are not considered sufficient to protect a country’s data. European data can be transferred to the USA even if held in a data centre in Europe and despite the protection of EU legislation. It is not open-slather though, the USA government must have a valid legal reason to ask for data such as law enforcement although the USA owner of a data centre must comply with that request. One particularly troubling report, if correct, described, however, how the names of Dutch public servants involved in implementing a Digital Services Act and their internal communications have been transferred to the USA House of Representatives by Microsoft at the request of the USA. We may well ask “why” this is necessary?
The EU wants independence, not only of its data centres, its cloud software, its chips, but also basic digital products such as word processing and meeting software. Some structural examples of the changes being made by EU countries include: the replacement of Microsoft’s Windows operating system on government computers with open source operating system Linux under direction of the French Interministerial Digital Directorate; France will also replace Microsoft video conferencing programs with local products; France is moving its health data off Microsoft Azure onto a local cloud; like China, France has also produced its own equivalent to ChatGPT; Denmark and Germany are moving off Microsoft products, Germany is also in the process of developing such things as AI-labelled algorithms and systems to help solve specific German industry problems; and; the Austrian army is using a locally produced cloud environment and local communication packages to, for example, help prevent foreign surveillance. The 27 countries of the EU are embracing increased independence in the digital sphere as can be seen in the Tech Sovereignty package released by the European Commission on the 27 May 2026.
The USA act that reportedly caused alarm to the EU countries is the Clarifying Lawful Overseas Use of Data (CLOUD) Act of 2018. It allows USA agencies such as those involved in national security, to access electronic data stored across international borders. A court in the USA found it was legally acceptable for the USA to extract data held in a Microsoft owned data centre, even if, sited in a European country. The EU does not have an agreement with the USA to transfer data unlike the UK and Australia who have both made agreements to allow the USA Act to be used for their respective countries. The UK first made an agreement in 2019 but it did not come into effect until 2022.
Australia signed an agreement in 2021 and a revised version in 2024. The Australia-US Data Access Agreement, allows designated authorities in both countries to issue orders directly to communication providers in the other’s country. This agreement is made under the Telecommunications (Interception and Access) Act 1979. Orders are only allowed for serious crimes, apparently those punishable by at least 3 years imprisonment. There are safeguards including data protection, minimising the collection, retention, disclosure and use of data as well as protecting privacy and being non-discriminatory. The Agreement can be terminated with one months notice by either country.
It should be noted Australian’s data may end up in the USA for other related reasons, for example, Crikey has reported the federal government is in negotiations for visa free travel that may result in Australian’s biometric data being given to the USA. Biometric data includes fingerprints and facial images.
Another reason for EU hesitation in using USA products may be that Big Tech “AI”-labelled model-related and data-related companies are increasingly becoming part of the USA’s defence (Department of War) apparatus. The USA President wants to take over Greenland against the wishes of both Greenland and Denmark, of which it is a territory. OpenAI (ChatGPT), Meta (formerly Facebook), Google (Gemini), Microsoft, Amazon, Elon Musk’s SpaceX, Oracle, Nvidia as well as start-up Reflection have all been given clearance to work on classified projects with the USA military. Google, OpenAI and the then XAI (now part of SpaceX) had already signed an agreement in 2025 to work with the military although the companies didn’t have the security clearance they have now. Anthropic was part of this group but due to a conflict with the government was no longer wanted and is now in a court dispute with the government. It is unclear if the military maintains use of Anthropic with Palantir on classified work while it considers alternatives, however, Anthropic reportedly continues to be used in other government and defence agencies.
These companies must see advantages to involvement with the USA military despite potentially losing customers. Perhaps private individual and company sales aren’t sufficient to cover the amount invested even into just the worldwide establishment of data centres suggests Naomi Klein, journalist and best-selling author, in an interview with Emily M. Bender (University of Washington, USA) and Alex Hanna (DAIR, USA) (DAIR 2026). The military and government have much deeper and more reliable pockets then can be gained from private sales. A popped bubble may lie ahead, as well, given the amount of capital invested. A second suggestion is that inaccuracy is not as obvious in war zones as it is in normal life. The interview was focused on Google Cloud Gemini as it was being incorporated into military systems at that stage (February 2026) but the USA plan is to use more than one of the Big Tech AI-labelled models in that system.
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Australia is very poorly served by its government. We can’t trust them to do the right thing for the people, our security or for our independence from a ravenous US. It’s a disaster.
The only person who seems to have knowledge of , and concerns about AI is Ed Husic ( well Pocock too) but as usual Albanese with his obsession with secrecy is shutting down serious debate about these electricity and water guzzling data centres. Will they pay full tote odds for these services or expect the government (and by extension us) to subsidise them or worse allow them to shif profits offshore as with gas etc.
Yep. Something else shoved down our necks thx to American capitalism.
The two previous posters sum it up.
“…Data Centres – Perhaps capturing more than data?….”
One thing is certain – data centres located in Australia will capture Australian dollars and will send tax free Australian dollars overseas despite any control that the Australian Government might attempt to exert.
Great because we have so much water here in Australia. I mean we have so few droughts and our rivers will never dry up and our artisinal basins will never be poisoned by fracking wells. May as well give it away for free, why not? Just like we did to Angus Stake and Barnyard Beetrooter. Nobody’s even gone looking for all that water and the 80 million because, who cares apparently.
The financial mythology of AI Data Centres is that all the hardware required to run them is imported from overseas manufacturers. So likely, of the reported say $100 million AI investment, over $90 million stays overseas buying the hardware.
Then the demands for electricity and water will strain the increasing production of solar & wind energy, and Snowy 2 if it ever gets finished, while re-cycling the cooling water required is yet to be discussed.
If AI Data Centres are to be established than they must be self-supporting in all senses. Their own electricity generation for ALL requirements, NOT national network, own water supply system, likely including storage dams and pipelines, as most graziers have to do.
A political sceptic could reasonably conclude that AI Data Centres are a ”Gold Mine Myth” intent upon raiding established electrical power & water supply infrastructure to the detriment of Australian voters.
I presume folk saw this week’s 4 Corners episode?
Bill Corpse, I suppose you read that the Americans are going to supply us with three Amazon rivers, just in case the new processes ruin the current fragile water supply?