Essay by Eric Worrall
… The tech industry has been pushing the government to … subsidise AI processing power through multi-billion dollar deals …
Tech giants pitch data centres as climate saviours – not threats
Ryan Cropp and Amelia McGuire
Sep 25, 2025 – 6.53pm
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The substantial future energy demands of Australia’s nascent data centre industry were cited by the Climate Change Authority last week as a key “delivery risk” informing the lower end of its recommendation that the government target a 62 to 70 per cent cut in carbon emissions by 2035.
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Push to subsidise AI processing power
The tech industry has been pushing the government to follow the lead of the United Kingdom, the United Arab Emirates, Norway and others and subsidise AI processing power through multi-billion dollar deals with players including Nvidia and generative AI juggernaut OpenAI.
Assistant Science Minister Andrew Charlton said on Wednesday the government was in the process of developing an AI and data centre strategy.
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In February last year, US data centre giant Equinix signed an offtake agreement with the operator of the $3 billion Golden Plains Wind Farm in Victoria to ensure its power requirements were fully offset by renewable energy.
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“When Google invests in data centres, it’s done in a way that creates additional new clean energy generation capacity on the grid, helping to support systems and enable investments needed to drive productivity and prosperity,” he said.
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“We need to retire coal and gas over time, but you can’t have demand going up while supply goes down,” …
Read more: https://www.afr.com/policy/energy-and-climate/tech-giants-pitch-data-centres-as-climate-saviours-not-threats-20250925-p5mxt6
Everyone seems to be dancing carefully around explaining why Big Tech needs large subsidies to invest in Australia.
I love the phrase the google representative used, “offset by renewable energy”. If they were planning to power the new data centers with renewables, they could have said “powered entirely by renewable energy”.
Except if the Aussie government caves to industry demands, it might not even be the likes of Google who will be paying for the useless new renewable energy plants. Perhaps the deal on offer is that the Aussie government has to pay for everything.
If the Aussie government pays an AI subsidy to big tech, who uses some of that subsidy to build renewable energy plants, that is functionally equivalent to the government giving much of that subsidy money directly to green energy companies, with one important exception.
Instead of being a “green subsidy”, the money used to build those renewable plants can be described as an “AI subsidy”.
The government gets to shrink the embarrassment of having to openly give 10s of billions of dollars to the renewable industry, by claiming the corporate welfare is actually being used to build the future, to boost Australia’s AI capability.
I mean, surely that can’t be the plan, can it? They surely wouldn’t be so sneaky and underhanded?