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NextDC (ASX:NXT) has agreed to build a blockbuster $7 billion data centre in Sydney’s Eastern Creek for ChatGPT owner OpenAI, which will run artificial intelligence models and stand as the largest in the southern hemisphere.
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Through today’s memorandum of understanding, OpenAI and NextDC agreed to plan, develop, and operate a next-generation hyperscale AI campus and large-scale GPU supercluster at the S7 site in Eastern Creek.
Many of OpenAI’s Australian customers, including Commonwealth (ASX:CBA), Wesfarmers (ASX:WES), and Fortescue (ASX:FMG), will use the $7B data centre.
OpenAI has been looking at Australian shores for some time, chief Sam Altman said, with the long-term vision being a widespread regional hub Down Under. “Australia is well-placed to be a global leader in AI, with deep talent, strong institutions, and a clear ambition to use new technology,” Altman said.
The partnership is part of a NextDC-OpenAI plan to create “sovereign AI infrastructure,” which boils down to Oz-controlled computing power.
This is only the beginning, OpenAI’s chief strategist Jason Kwon declared, with a multi-year partnership right at the core of December’s $7B team-up. “Our hope is this [development plan] sends a pretty clear signal to the Australian markets that there is more to be built to enable more economic activity.”
Altman and Kwon have been meeting with numerous Australian government officials and even U.S. Ambassador Kevin Rudd in recent weeks to thrash out red tape. Kwon was at Labor’s grand “AI strategy” unveiling in Sydney.
Treasurer Jim Chalmers welcomed the investment, declaring it’s “more proof Australia has the talent, clean energy potential, trade partnerships, and policy settings needed to be one of the big winners when it comes to AI.”
NextDC leadership is understandably excited, too, with chief executive Craig Scroggie most recently telling The AFR the company would be using the monster cash injection to build even more centres across Australia.
Last August, NextDC promoted several advisors to land joint venture deals to own, develop, and operate two upcoming data centres in Western Sydney.
This morning, NXT shares open at $13.44 each.
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