Australia announces new AI office and strict energy, water requirements for Data Centres

On July 15, 2026, Australian Prime Prime Minister Anthony Albanese announced the creation of a new Office of AI within his department to coordinate upcoming national standards. Under the proposed rules, to be legislated in early 2027, large-scale data centres must underwrite their own power, act as net energy producers, and limit water usage. While the Climate Council and unions welcomed the intervention, the Greens and Greenpeace demanded an immediate moratorium on data centre approvals.

Data centre energy requirements

• ▪Under proposed Australian AI standards, large-scale data centres must underwrite their own power supply and pay their full share of grid connection
• ▪The proposed Australian AI standards will legally require large-scale data centres to be net producers of energy, adding as much power to the grid as they consume

Data centre water usage limits

• ▪The proposed Australian AI standards will establish clear rules regarding where large-scale data centres can be built
• ▪The upcoming Australian AI standards will legally force large-scale data centres to minimize and limit their water usage

Office of AI establishment

• ▪Prime Prime Minister Anthony Albanese announced the establishment of a new Office of AI within the Department of the Prime Minister and Cabinet
• ▪The new Office of AI will coordinate the design of national standards and ensure a whole-of-government approach to artificial intelligence

Copyright protections for creators

• ▪The Australian government has consistently refused to grant big tech companies exemptions from paying for copyrighted content used to train artificial intelligence
• ▪The proposed Australian AI standards will prevent companies from using Australian books, music, art, or news to train artificial intelligence without creator control

Stakeholder responses to policy

• ▪The Australian Greens and Greenpeace Australia Pacific called for a moratorium on new data centre approvals until mandatory regulatory rules are in place
• ▪The Climate Council warned that unchecked growth of artificial intelligence data centres could cause soaring energy prices and increased climate pollution

AI standards legislation timeline

• ▪Prime Minister Anthony Albanese will seek agreement on the AI standards from state and territory leaders at a national cabinet meeting in August 2026
• ▪The Australian government plans to introduce the artificial intelligence standards legislation to parliament and pass it in early 2027