OpenAI, NextDC partner on $4.6B AI data center in Australia

OpenAI has joined hands with Australian data center operator NextDC to build next-generation AI-powered data centres in Sydney, in an effort to upscale its dominance in the Asia Pacific.

As per deal, the partners would build and operate a 550-megawatt hyperscale AI data center facility at NextDC’s campus in Eastern Creek, 45-km west of central Sydney, as reported by the Forbes.

The $4.6 billion worth AI hub is designed to be developed on a 258,000-square-meter site of NextDC’s S7 facility. The highly-anticipated data center will cater to the needs of ChatGPT maker’s clients, including Commonwealth Bank of Australia and retail giant Wesfarmers.

Following the collaboration news, the shares of NextDC soared as much as 11 percent in Sydney trading, before closing 3.1 percent higher.

Within years, NextDC has become one of the region’s massive data center operators , with major facilities working in Australian cities. It is also seeking to build new facilities in Auckland, Tokyo, and Kuala Lumpur.

In the tech-driven world, tech giants are investing hefty money in data centers to outcompete rivals. Australia’s data center industry has become popular among investors.

In 2024, the Canada Pension Plan and Blackstone purchased data center company AirTrunk for A$24 billion worth.

Moreover, Microsoft and Amazon are also pouring investments in cloud computing and AI infrastructure in Australia. As a result of the expanding market and surging AI demand, the Australian industry’s capacity will triple to 3.6 gigawatts by 2030.

The deal came on the heels of OpenAI’s recent decision to issue “red code” in the company to improve ChatGPT in an effort to break the dominance of rivals, such as Anthropic and Google.