Data centre building boom hits $18b as energy demand threatens power grid

Spending on new data centre developments has surged ahead of offices and warehouses. Australia is spending more money building data centres to power the AI revolution than new offices and warehouses where humans will work, new figures show. The analysis of ABS Building Activity data showed spending on electricity hungry data centres has surpassed the amount being invested in the construction of offices and warehouses combined. About $18.2 billion of work was started between 2025 and 2026 in the category that includes new data centre developments, compared with $10 billion of work on new warehouses and $7.3 billion on new offices. The surge in data centre building has been flagged as inflationary, with the RBA recentlly noting that it was one of the forces fuelling the sticky inflation that’s led to interest rate hikes and, in turn, falling property prices. MORE: Aus AI boom putting your home at risk $18.2b worth of work was started on projects including data centres last financial year. MORE: How AI knocks $35k off your home value The ABS data tracks 15 categories of non-residential property in terms of how much work has been started, finished or is yet to be done. The category tha...