AI Accelerates Data Centre Demand in Next Phase of Growth

AI uptake is set to shape the next phase of data centre growth in Australia, increasing the scale, infrastructure requirements and investment intensity, new CBRE research shows.

CBRE's Australia Data Centres 2026 report identified AI accelerating demand, power availability, deliverable supply, differentiated asset quality, and selective capital as key themes that will define the next phase of growth for the asset class.

CBRE's Head of Data Centres Research, Australia, Sass Jalili said while cloud adoption, digitalisation and hyperscale expansion continue to underpin Australia's data centre expansion, increased AI-driven workloads have introduced a new layer of demand for the sector.

"What is changing is the scale, capital intensity and physical requirements of development," Ms Jalili said.

"The next phase of growth will increasingly be determined by access to secured power, infrastructure readiness, experienced operators and creditworthy customers. As development requirements intensify, the ability to deliver operational capacity will become an increasingly important differentiator."

The report notes electricity availability is beginning to broaden location consideration for data centres.

CBRE's Pacific Director, Data Centres, Darcy Frawley said the optimal location for a data centre increasingly sits at the intersection of power and community support.

"Australia's data centre footprint remains highly concentrated in Sydney and Melbourne. However, as new campuses require substantially more power and face increasing social licensing issues, strong consideration is being given to where the next frontier of development is.

"Growth opportunities are broadening geographically, with significant expansion planned in Perth, Brisbane and Darwin. In the past nine months we’ve also seen the emergence of regional locations, such as La Trobe Valley and Hunter Valley regions, where scalable power can be secured, sometimes with support from behind the meter generation," Mr Frawley added.

The report shows data centres continue to attract significant institutional capital, with direct investment across Asia-Pacific reaching US$11.6 billion in 2025, reflecting the sector’s growing importance as a core infrastructure asset class. 

In Australia, the investment opportunity is expected to expand considerably. CBRE’s October 2026 research forecast shows Australia’s investable data centre universe is expected to grow by approximately 90% to A$57 billion by 2030.

Australian data centre operators raised A$35 billion across debt and equity funding in 2026 to early September, up from A$24 billion in 2025.

Mr Frawley noted Australia is one of Asia Pacific's leading data centre markets underpinned by substantial installed capacity base and strong future development pipeline.

"Capital expenditure by the world’s largest technology companies is accelerating sharply as hyperscalers invest in cloud and AI infrastructure," he said. 

"Australia is increasingly participating in this investment cycle. Major global technology companies are expanding domestic cloud, compute, and AI infrastructure reinforcing Sydney and Melbourne as strategic locations within their regional networks," Mr Frawley added.