SYDNEY — Australia is preparing for a major expansion of its artificial intelligence infrastructure after Nvidia announced plans to work with local technology companies to significantly increase data-centre capacity across the country.

Nvidia said on September 10 that it is partnering with Australian cloud and data-centre operators including Firmus, CDC, NEXTDC and AirTrunk. Together, the companies are targeting as much as 2 gigawatts of AI-related computing capacity by 2027.

The planned expansion would represent a major increase from Australia’s existing data-centre capacity of about 1.6 gigawatts. The additional infrastructure is expected to provide more computing resources for businesses and researchers developing artificial-intelligence models, applications and automated systems.

Nvidia said the growing use of AI across different industries is creating rapidly increasing demand for high-performance computing. The company expects the new facilities to support Australian innovators while also contributing to wider investment in electricity-generation infrastructure.

Australia has increasingly positioned itself as an attractive destination for data-centre investment because of its technology sector, infrastructure and growing demand for cloud computing. The rapid expansion of AI, however, is also creating new challenges for governments and communities.

Large data centres consume substantial amounts of electricity and, depending on their cooling systems, can require significant quantities of water. Their environmental footprint has therefore become an increasingly important part of discussions surrounding Australia’s digital infrastructure strategy.

The Nvidia-backed expansion could strengthen Australia’s position in the regional AI economy by providing domestic access to advanced computing capacity. It may also encourage additional investment in power generation and supporting infrastructure.

The announcement comes as governments and technology companies worldwide compete to build the computing infrastructure needed for the next phase of artificial-intelligence development.

For Australia, the challenge will be balancing the economic opportunities created by AI investment with the demands that large-scale data centres place on electricity networks, water resources and local communities.