AI data centres are growing rapidly across Australia, with their size, noise, and environmental impact drawing public attention. In areas like Lane Cove, a suburb on Sydney’s lower north shore, residents report hearing a constant hum from a data centre located just 350 meters from their homes. Four more data centres are planned for the local industrial park, highlighting the country’s increasing role as a global hub for data storage and processing. Investors are attracted by Australia’s access to clean energy, natural gas reserves, and available land. OpenAI’s CEO Sam Altman has even suggested that Australia could become a data centre capital if it wished. Currently, there are 162 data centres in the country, with plans for 90 more, and over A$155 billion in investment lined up. If approved, one of the world’s largest data centres will be built in western Sydney, consuming one gigawatt of energy—making it the country’s largest single energy user. Another large data centre is already under construction in Marsden Park, just 100 meters from a local community. The rapid expansion of data centres has raised concerns about their impact on water supplies, energy use, and the environment. Experts warn that Australia may struggle to meet the growing energy and water demands of these facilities. According to the Australian Energy Market Operator, data centre energy needs could triple by 2030 nationwide. Without significant new renewable energy generation and storage, data centres could push power prices in New South Wales (NSW) up by 26% by 2035, according to the Climate Council. There are also fears that the current boom could lead to a new generation of coal and gas power plants. A recent report by Greenpeace Australia Pacific found that no data centre operator analyzed had adequately proven their claims of driving the country’s renewable energy growth. In the United States, many data centres have found it cheaper to build new gas-fired power stations rather than waiting for more renewable energy. In Australia, the data company Cloud Carrier plans to build three gas-fired power stations to supply energy to an existing data centre and two more in the future. Data centres also use vast amounts of water, up to 40 million liters per day, to cool servers and prevent overheating. This is equivalent to the daily water needs of 80,000 households. In a country prone to drought, where Sydney is already working to increase its drinking water supply over the next five to 10 years, this is a growing concern. Sydney Water estimates that data centres could use up to 25% of Sydney’s drinking water by 2035. In response, Prime Minister Anthony Albanese announced new legislation requiring “large-scale” data centres to fund power supplies, limit water use, and pay for any additional water infrastructure. However, the law, set to take effect in 2027, will only apply to new proposals, not to projects already built or under construction. Environmental and community groups have called for a pause on all data centre development, arguing that the government is prioritizing expansion over sustainability and water storage targets. Residents in areas affected by data centre expansion say they were not consulted about the developments. One proposed data centre is just 16 meters from the nearest home and 160 meters from a local primary school. If the four planned data centres in the industrial park are approved, 50% of current businesses could be forced to relocate, potentially taking their jobs with them. Felipe Tanaka, a manager in the industrial park, says he was unaware of the plans and fears losing half of his employees. While a large data centre can employ more than 1,000 workers during construction, research shows this number drops to around 100 once the facility is fully operational. NSW Treasurer Daniel Mookhey argues that the jobs created by data centres come not from those who work in them, but from those who use them, such as companies like Microsoft and Amazon. However, it is unclear what other skilled jobs might be created, and the exact purpose of the data centres remains uncertain. Some residents question the value of these facilities in their neighborhoods, especially when drinking water, energy, and land are being used for tasks like generating AI-powered cat GIFs, which consume energy equivalent to running a microwave for an hour.