Australian data centre companies have raised at least A$35B this year, according to an RBA analyst estimate as reported. The average from 2020 to 2024 was about A$4.6B a year. That’s roughly seven times the old annual average, landing in one sector in a single year.
The money
The A$35B figure was reportedly described as conservative, so the real number could be higher. For comparison, five years at the old pace would add up to about A$23B. This year alone has blown past that.
The timing
The ABS says CPI rose 4.0% over the year to August, up from 3.5% in July. At the end of September the RBA reportedly lifted the cash rate to 4.6%.
Governor Michele Bullock has reportedly said the AI boom is adding to demand in the Australian economy. The other side of the argument is that the productivity gains AI could bring, which would help bring costs down, haven’t shown up yet.
The weird one
In the August CPI, games, toys and hobbies prices were up 12.7% in a year. The ABS puts it down to price rises in memory and storage components being passed on to shoppers.
My read
Nobody has shown that data centres pushed rates up. Inflation has plenty of causes. But that’s a lot of money hitting one sector at the same time, and when the ABS is pointing at memory prices in the toy aisle, it’s a fair question to ask.