Chinese Tech Giants Target Australia’s Booming Data Centre Market
Synopsis
TikTok and Alibaba are weighing local infrastructure investments that would require Foreign Investment Review Board approval amid heightened national security scrutiny.
Alibaba and Tiktok are exploring plans to develop large-scale data centres in Australia, a move that could become a significant test of the Albanese government's approach to foreign investment in critical infrastructure.
According to sources, both companies have considered submitting proposals to the FIRB as they assess opportunities in Australia's fast-growing data centre market. TikTok's owner, ByteDance, had previously faced delays in obtaining FIRB clearance amid broader security concerns while Alibaba is understood to have begun discussions with Australian energy producers to secure power for a potential local facility.
The proposals come as Australia experiences a surge in demand for digital infrastructure, driven by cloud computing and artificial intelligence.
However, any approval would likely face close scrutiny given the strategic importance of data centres and ongoing concerns about cybersecurity, data sovereignty and foreign ownership of critical assets.
Data Centre Boom Meets National Security Debate
Industry estimates point to a A$150 billion pipeline of planned data centre investments across Australia that reflects the sector's rapid expansion as businesses increase spending on AI and cloud services.
Under Australia's foreign investment rules, overseas investors generally require FIRB approval to acquire a 10% or greater interest in an Australian data centre business, regardless of transaction value.
Security experts remain divided over allowing Chinese technology companies to expand their infrastructure footprint in Australia. Former Defence Department deputy secretary Peter Jennings argued that any proposal involving critical digital infrastructure should be assessed with national security as the primary consideration.
Meanwhile, FIRB has consistently maintained that Australia welcomes foreign investment where it aligns with the national interest.
AI Growth Intensifies Demand for Digital Infrastructure
The interest from Alibaba and Tiktok also highlights the growing competition for data centre capacity as AI adoption accelerates worldwide. These facilities require significant computing power and electricity. It increases pressure on Australia's energy network while supporting broader digital transformation initiatives.
Recent warnings from the Australian Energy Market Operator and AI developers about emerging cybersecurity risks have further elevated the importance of secure infrastructure.
As demand for AI services continues to rise, the government's decision on any future applications from Chinese technology firms could shape both Australia's investment landscape and its approach to balancing economic growth with national security.
Source: Stockhead
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
