Andrew Charlton says Albanese government seeking to avoid America’s ‘badly wrong’ data centre rollout

Australia’s AI lead Andrew Charlton says the Albanese government was seeking to avoid America’s “badly wrong” data centre rollout and the political risk of failing to strike the balance between investment and social licence.

The Assistant Technology Minister declared AI an “essential ingredient” for economic growth which could rival the 1880s railway boom during a speech to the The Australian’s Energy Nation forum on Wednesday.

Across the United States a grassroots resistance to data centres is intensifying and has become a major issue ahead of the 2026 midterms.

Dr Charlton warned that Labor would have to walk a fine line between capitalising on the data centre investment boom and bringing Australians along the journey.

“I think we have a lot to learn from the American experience. There are places in the United States where they’ve got it badly wrong,” he said.

“Households have paid the price for that: higher electricity bills, restricted access to water, negative impacts on local communities, and you can see the consequences of that.

“The consequences of that is a huge loss of social license from the data centre industry.

“And in the midterms, the data centre issue is becoming a top-tier political issue in a lot of races, and justifiably so.

“Our position in Australia is: we want to learn from that experience.”

He referenced the PJM Interconnection case study in the US electricity market where data centre growth has been most clearly tied to higher household power bills

“We have seen the PJM story unfold in real time, and many others like it. We know exactly how it went bad,” he said.

“Connection first, questions later, and a decade of pain for consumers.”

It comes as Australia is shaping its AI standards, which has opened for consultation with an aim to introduce legislation to Parliament in early 2027.

Under the plans, Australia would force AI companies to comply with strict rules of operation, including requiring data centres to bring their own renewable energy.

Dr Charlton expressed his ambitions to use the data centre investment knocking on Australia’s door to help to safeguard Australia’s energy transition by forcing data centres to build their own renewable energy sources and to contribute to the nation’s energy infrastructure.

He insisted, if done right, it could help reduce household power bills by splitting the costs between consumers and the power-hungry data centres.

“You can think about it like an Uber Pool,” he said.

“The more trips being delivered by the car, the lower the cost for everyone.

“The more people in the car, the more you are fractionalising the cost of the infrastructure, making it cheaper for each passenger.

“Data centres will need some new infrastructure, but they will also share costs of a lot of infrastructure we need anyway.”

“The goal should not simply be to protect the electricity system from data centres.

“It should be to use this enormous new source of demand to build more supply, use our existing grid more efficiently, and spread its fixed costs across more customers.

“Get that right, and data centres could play a more positive role in the energy system than many people might expect.”But it comes as Australian communities have expressed similar backlash like the US to data centre construction, with local governments also joining the fight.

A string of Victorian councils who appeared before a Senate inquiry into data centre development on Wednesday, including Brimbank, Melton, Hume and Maribyrnong, called for a pause to approvals.

Councils expressed while they were supportive of data centres, there first needed to be better rules in where and how they operate.

The committee also heard from concerned community members including Jacqui Glover from the Citizens of Tottenham group.

Ms Glover told the committee she lived 15 metres from a data centre and was forced to sleep with a white noise machine due to a constant humming from the facility.

“We’ve lived with this for five years. It’s far too close to homes. It’s ridiculous, and it should just never have been built there in the first place,” she said.

“We sleep with a white noise machine on every night because not just for the humming and not just for the it’s the other background noise that goes with it.

“I would describe it as a low-level humming noise, 24/7.

“And there’s tanks on the side of the building. When the wind blows in a certain direction, it sounds like a car doing a burnout.

“There’s 24/7 security on site. There’s 80 security guards.

“So, it’s impacted our lives in so many ways.”