How Australia Could Be Cut Off - But AI Might Save Us

Australia's Digital Vulnerability and the Path to Sovereignty

Australia is facing a critical juncture in its digital infrastructure, with experts warning that the nation risks an internet and communications blackout if it fails to capitalize on becoming a major data center hub. A former Australian Defence Force (ADF) Brigadier turned academic, Professor Ian Langford, has raised concerns about the country’s reliance on just 15 undersea cables for 99% of its international data traffic. These cables support essential services such as banking, stock markets, emergency response systems, defense communications, and even streaming platforms like Netflix.

Professor Langford highlighted the potential threat posed by malicious foreign actors, such as China, which could disrupt this crucial infrastructure. Such an attack could plunge Australia into digital darkness, leading to massive financial losses on the Australian Securities Exchange (ASX). He emphasized the need for Australia to build AI-driven data centers to enhance the nation’s sovereignty and resilience, providing a backup option in case of disruptions.

The Strategic Importance of Data Centers

Langford pointed out that the People's Liberation Army (PLA) has recently cut some military undersea cabling in Taiwan, prompting a reevaluation of Australia’s vulnerability to similar threats. “We need to onshore a lot of our critical data,” he said, “so that we have the ability to effectively have a redundancy in the event of some sort of disruption to our critical infrastructure.”

From a regional perspective, Australia could also serve as a hub for housing data from South-West Pacific nations and other countries in the southern hemisphere. This would ensure that the region can survive in the event of a large-scale disruption, such as a conflict between the US and China over Taiwan.

Langford described data centers as "hothouses that convert energy into intelligence, into information." He explained that these facilities require power, access to infrastructure, security, skilled personnel, and cost sensitivity. Australia is well-positioned to meet these requirements, with Treasurer Jim Chalmers recently stating that the country is among the top five global destinations for data centers.

Challenges in Building Data Centers

Despite the potential, many technology firms have faced challenges due to regulatory hurdles. Dan Roberts, a former Macquarie banker and co-founder of Bitcoin mining and data center-building firm IREN, expressed frustration with the current situation. He stated that while he would love to build data centers in Australia, it is "just not practical."

Roberts drew a parallel between Australia’s current position in the AI sector and its approach during the resources boom of the early 2000s. Instead of building up its own manufacturing industry, Australia focused on exporting commodities. “We're in the same position now,” he said, “where the fourth industrial revolution is essentially energy as your input and a digital good as your output.”

He noted that Australia has the necessary resources, including land, wind, and solar energy, but the red tape is preventing progress. His comments come after Atlassian co-founder Scott Farquhar called for Australia to harness the AI revolution by becoming a world leader in data centers.

The Future of Data Centers in Australia

Farquhar argued that data centers could allow Australia to "export megawatts as megabytes (and get paid megabucks)." He described the opportunity as a multi-billion-dollar, multi-decade prospect. Langford supports this view, citing figures that show data centers currently account for 1.5% of global energy production. By 2030, this is expected to rise to 13%, with most of the energy used for cooling computer chips.

Langford stressed that Australia is at a crossroads. If the nation wants to be a leader in emerging technologies such as AI and quantum computing, it must build critical infrastructure here to maintain sovereignty over these opportunities. “If we don't do it, we're going to be left behind,” he said. “It's as simple as that.”