In short:
As companies continue their push to build AI data centres in Australian communities, an AI institute cautions that the touted jobs and economic benefits may not materialise if public authorities do not put binding conditions on proponents.
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authorities → continue → proponents
Submissions have been made about the rollout of AI in Tasmania as part of a parliamentary inquiry.
What's next?
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What → make → inquiry
With one company forging ahead with multiple projects in Tasmania, the AI institute says the state will hold the strongest negotiating position "before facilities are approved, not after".
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facilities → forge → position
An artificial intelligence institute has warned there may not be much economic benefit from data centre developments if public authorities do not put binding conditions on proponents.
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authorities → warn → proponents
The Tasmanian government's inquiry into AI data centres received 152 submissions from the public and stakeholders.
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inquiry → receive → public
Tasmania has multiple AI data centre projects in the pipeline.
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Tasmania → have → pipeline
Firmus Technologies is building one in Launceston, has approval for another at Long Reach in the state's north, and is seeking approval for another at Wesley Vale in the north-west.
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Technologies → build → west
It was also revealed in parliament that six additional data centre projects are being explored, by unnamed proponents.
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projects → reveal → proponents
A submission to the inquiry from the University of New South Wales AI Institute said AI data centre developments presented opportunities for Tasmania, but only if binding conditions were put on them to ensure public benefit.
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conditions → say → benefit
"Data centres do not, by themselves, build a local AI industry or deliver lasting community benefit," the institute's director, Sue Keay, said.
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director → build → benefit
"Without deliberate mechanisms, the economic benefit of data centre approval may largely end when construction ends, leaving the land, energy and water commitments behind.
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construction → end → commitments
"Tasmania will hold the strongest negotiating position before facilities are approved, not after."
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facilities → hold → position
Dr Keay recommended a levy on large-scale data centre projects to fund AI research, talent and capability.
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Keay → recommend → research
She also said a defined amount of compute should be reserved for the public interest, for users including Tasmanian researchers, universities, start-ups, small and medium enterprises and not-for-profits.
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amount → say → profits
"The value in AI lies in compute, data, models and skills, not in the building," she said.
"
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she → lie → building
The operator that obtains planning approval rarely controls the compute.
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that → obtain → compute
Obligations should cascade through leases and connection conditions to the tenants who do."
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who → cascade → tenants
Dr Keay also said the local workforce should be developed through apprenticeships, TAFE pathways, university partnerships and PhD placements.
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workforce → say → apprenticeships
AI bubble could leave Tasmanians paying
AI data centres use large amounts of energy.
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centres → leave → energy
For instance, Firmus's three Tasmanian projects, once operating, would use 444 megawatts of electricity — making it the state's largest power user.
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it → operate → electricity
A submission to the inquiry from the Tasmanian Policy Exchange, based at the University of Tasmania, said given the future was uncertain for some of Tasmania's large, industrial energy users — there could be more electricity to go around.
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future → base → users
"If this happens, having AI data centres to soak up the load, underwrite grid costs, and pay a full commercial price for power could be very handy," researchers Robert Hortle and Judith Mutuku wrote.
"Although this could introduce a form of 'concentration risk' by making the grid heavily reliant on a small number of customers from a single industry."
While data centre proponents paying full price for energy could support Hydro Tasmania and the state government's bottom line, the researchers said, it came with a trade-off.
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it → happen → off
"Some established industries rely on low-cost power to remain competitive, and higher prices could make it harder for them to survive," they said.
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they → establish → power
The researchers said parts of Tasmania's transmission infrastructure could not cope with a large new load, meaning it was essential that AI data centre proponents funded expensive upgrades themselves.
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proponents → say → upgrades
They also warned that if the AI bubble bursts, Tasmania could have surplus energy and transmission infrastructure.
"If major network upgrades and new generation capacity occur for projects that are then delayed, scaled back, or cancelled, Tasmania could be left paying for under-utilised infrastructure," they wrote.
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they → warn → infrastructure
Resources register could give parliament and public oversight
In its submission, the Digital Infrastructure Institute said there were gaps in Tasmania's planning system.
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Institute → give → system
"Facilities are assessed one application at a time while their effects are cumulative across a corridor or precinct," the institute's founder, Chris Molloy, said.
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founder → assess → corridor
"Proposed commitments are assessed as design intentions, made before the facility exists, with no settled mechanism for testing what the operating facility actually does."
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facility → propose → what
Mr Molloy wrote that New South Wales had tackled this by introducing "written numeric efficiency thresholds into its assessment pathway".
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Wales → write → pathway
The institute recommended annual oversight of resource allocation, as what proponents promised at the approval stage did not always match up with reality.
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promised → recommend → reality
A single register, reported to parliament each year, would do most of the work: each approved facility, the resource commitments it was approved against, its energy and water allocations, its reported actual consumption and its compliance status.
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it → report → work
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Firmus 'supports consistent, transparent public reporting requirements'
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Firmus → support → requirements
In its submission to the inquiry, Firmus said "modelling" had indicated a "cumulative contribution to gross state product of $12.8 billion from the Launceston facility from the 2026 to 2035 financial years", with an "average of approximately 1,360 jobs supported during operations across direct, supply-chain and induced employment".
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modelling → say → employment
Firmus also said it "supports consistent, transparent public reporting requirements for AI and data infrastructure".
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it → say → AI
"At a minimum, reporting should cover energy and water use, resource efficiency, environmental performance, renewable energy and grid commitments, employment and local procurement outcomes, and delivery of community benefits."
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reporting → cover → benefits
The Aporia
