Overview
- The Treasury note, published to inform the Intergenerational Report, says surging AI and data‑centre investment could raise the real neutral interest rate by increasing demand for capital and competition for scarce resources.
- Australia already has about 162 operational data centres with roughly 130 proposed and Treasury estimates the build‑out could be worth about $150 billion by 2030, which is driving large capital flows and pressure on labour and materials.
- Treasury finds adoption is widespread but shallow with around two‑thirds of firms reporting some use of AI and fewer than 10% reporting significant adoption, and it says firms must change processes, management and skills to realise productivity gains.
- Officials warn of downside shocks that could wipe out gains before they arrive, including AI‑enabled cyberattacks, a sharp correction in concentrated tech valuations, and geopolitical risks that would reduce investment.
- The government has begun active engagement with US AI firms and is preparing regulatory measures and the Intergenerational Report to govern data‑centre conditions, energy use and how Australia captures more local value from AI investment.