Aussies voice concerns over AI data centre development as Albanese joins international push for regulation

Australian communities have voiced fears over AI data centres in their backyard at the first of a string of parliamentary hearings into their increasing construction across the country.

Residents in Sydney’s Lower North Shore community of Lane Cove, which is emerging as a data centre hotspot, were among the first witnesses to be heard by the Senate inquiry.

The new probe, which travels to Victoria on Wednesday and Canberra next week, will examine potential gaps in data centre regulation and their impact on communities and resources.

It comes as Anthony Albanese discussed the technology’s potential threats and opportunities with world leaders on the sidelines of the UN General Assembly in New York this week.

Groups expressed concerns over a lack of resident and indigenous consultation, as well as health, environment and bushfire assessments.

Grassroots climate action group Stop The Slop expressed their fears Western Sydney would become a data centre epicentre and called for an approvals moratorium until further research was undertaken.

Campaigner Nirvana Prasad accused tech companies of insufficient engagement, providing a case study of a project which only received four submissions from a consultation period.

“Our Western Sydney community feels they’re being forced into this situation with very few households even knowing that it’s happening, let alone understanding the possible consequences,” she said.

“That was articulated by one resident of Erskine Park, who lives about six kilometres away from the proposed site. I myself live eight kilometres from the site and never received notice of the proposal.”

Sweltering Cities senior campaigner Sanaa Shah expressed concerns over the heat and long-term livability impacts of data centres near residential areas.

“We emphasise that communities and households should not be left to absorb the impacts of private developments through higher energy costs, increased infrastructure pressures, loss of green space, or greater exposure to heat and pollution,” she said.

“We are calling for a pause on further data centre approvals until the cumulative community impacts are properly assessed and managed through strong safeguards. This should include heat impact assessments and protections to ensure rising infrastructure and energy demand does not translate into higher costs for households.”

Lane Cove Responsible Planning’s members Paul Trainor and Sasha Titchkosky called for a review of planning definitions of data centres, claiming they were often marked as “light-industrial” in NSW when they should be treated as “heavy industrial sites”.

After giving an example of a data centre which held one million litres of diesel and almost 200 tonnes of lithium batteries on site, Ms Titchkosky said it would be “completely inappropriate” to label it as a “light industrial site”.

“They should be treated like heavy industry because their impacts are so great,” she told the inquiry.

While in the US for the UN General Assembly, Anthony Albanese joined with more than 20 world leaders to call on governments to act on implementing stronger safeguards on AI.

The Prime Minister had vowed to take his approach to AI and data centres to the international forum during a landmark speech on July 15 at the University of Sydney where he set out guidelines.

Under the standards Australia is hoping to legislate in early 2027, it plans to force data centres to bring their own renewable energy and company with strict rules of operation.

It will include complying with distance requirements from residential zones as well as copyright laws when training AI models on Australian material.

Mr Albanese’s Innovation Minister Tim Ayres released the discussion paper for the AI standards on Friday which will be open for consultation until October 9.

But communities before the inquiry said already they were concerned by the data centres already approved or underway.

Ms Prasad described Australia’s roll out as “rapid and unchecked” and warned data centre development needed intervention or it could set a dangerous precedent.

“Stop the Slop is asking for an immediate moratorium on data centres in Western Sydney until we can determine their cumulative impact and have transparency on data centre use,” she said.

The next hearing in Victoria comes after the State’s Premier Ben Carroll on Tuesday unveiled new rules for data centres, including that they will have to “power themselves, protect homes and roads, and pay their way”.

“If we get that right, we can all share in their economic benefits, especially the local community,” Mr Carroll said.

Victoria’ Planning Minister Sonya Kilkenny describe the guidelines as a blueprint for other jurisdictions to follow.

“Data centres must bring their own supply to protect our energy costs — and they can’t be built near homes,” Ms Kilkenny said.

However, shadow communications minister Sarah Henderson criticised Victoria’s Labor government for their delayed intervention.

“Ben Carroll made some further policy announcements this morning, several years after the Victorian government was ticking off these developments. Surely the buck stops with the governments, which have allowed these data centres to be developed in some of the most inappropriate places,” Senator Henderson said.

The international AI collaboration on Tuesday came ahead of a highly anticipated meeting on AI between US President Donald Trump and China’s leader Xi Jinping at a summit in New York later this week.

“We hope for a positive meeting between President Trump and President Xi,” Mr Albanese said on Tuesday when asked about the formal bilateral.

“Other nations are putting forward their national interests, in the interests of Australians, in our case.

“Australians do want to know that artificial intelligence won’t be in control of us.

“We need to shape how it rolls out, rather than have artificial intelligence shape the way that our society functions.”