AI and Data Centre Boom Pushes Australian Business Investment to Record High

Growing demand for artificial intelligence infrastructure has driven Australian business investment to a record high, led by a sharp spike in data centre spending.

New figures from the Australian Bureau of Statistics (ABS) show private capital expenditure rose 6.5 percent in the March quarter to be 14.6 percent higher than the same time last year.

Investment in new equipment and machinery climbed 18.1 percent to the highest level recorded in the series, with the information media and telecommunications sector rising 96.1 percent.

ABS head of business statistics Tom Lay said investment in data centre infrastructure was the main driver behind the increase.

“The lift in investment was the result of investment in data centre equipment, specifically server racks and processing equipment, significantly boosting the overall figure,” he said.

“This quarter’s rise builds on a similar spike in data centre investment recorded in the September quarter of 2025.”

Capital expenditure in non-mining businesses rose by 8.8 percent, but miners were more cautious, with expenditure across that sector growing by 7.2 percent.

Investment in buildings and structures fell by 3.8 percent, with decreases across both the non-mining and mining sectors.

Lay said the decline reflected several major projects reaching completion.

“The fall in buildings and structures was driven by large projects reaching completion, particularly across manufacturing, electricity, gas, water and waste services and mining,” he said.

Data centres were an exception to that trend, with construction activity in the information media and telecommunications sector rising for the seventh straight quarter, up 12.6 percent.

New South Wales and Victoria, which account for much of Australia’s data centre investment, recorded increases in building activity of 22.1 percent and 12.7 percent respectively.

South Australia recorded a slight increase, while all other states and territories declined.

Businesses also revised up their investment expectations for the next two years.

The ABS said firms now expect capital expenditure to rise 4.5 percent in 2025-26 and 9.9 percent in 2026-27.

“Business expectations on future capital expenditure [are] driven by continued investment in data centres,” Lay said.

The figures come amid growing demand for artificial intelligence infrastructure and increasing scrutiny over the energy and water demands of large-scale data centres.

The federal government recently released new expectations for data centre and AI infrastructure developers, requiring projects to support Australia’s net zero goals and sustainable water use.

Major technology companies have increasingly linked data centre expansion to renewable energy investment. Amazon, which is building data centres across Australia, says it has invested in 20 renewable energy projects with a combined capacity of 990 megawatts.