When Jacqui Glover moved to West Footscray a decade ago, her street was a quiet mix of dusty factories, modest homes and low-slung warehouses. The factories eventually moved out. The data centres moved in.
Standing on her front porch, Glover gestures toward the red-and-black five-storey monolith that looms just metres from her front door. The footpath across the road has been dug up at least eleven times by different companies laying, ripping up and relaying high-voltage power lines and data cabling to feed the $1.5 billion facility now in operation beside her home.
The Sydney Morning Herald visited the site five times over summer. On four of those visits, the street was being excavated.
ASX-listed NextDC proposed the West Footscray facility in 2021, purchasing almost an entire 10-hectare block, including land down to Stony Creek, for $47 million. Just five people formally objected at the time. Today, more than 1,000 construction workers are transforming what was once warehouses, factories and vacant scrubland into a "hyperscale" data centre. The first stage, already one of Melbourne's largest, is operational. More stages will follow.
Down the street from Glover, Ryan O'Shaughnessy says his family has decided to sell up and move elsewhere in the west. The data centre was a significant factor. Beyond the disruption of construction work that has years still to run, he questions whether prime inner-city land should be used this way at all.
"Not to mention the environmental impact," O'Shaughnessy says. "I just don't want to look at it any more."
A global gold rush, a suburban reckoning
The excavators Glover and O'Shaughnessy watch from their porches are a physical expression of a global phenomenon. Hyperscale data centre developers are expected to spend $US700 billion (roughly $984 billion Australian) building new facilities in 2026 alone. These centres are, in the most literal sense, "the cloud": the enormous industrial warehouses of servers and kilometres of cabling that process our digital lives.
Investment in Australian data centres was already accelerating before 2022, driven by the shift of banking, retail, insurance and personal data storage to online platforms. Then OpenAI launched ChatGPT and the pace intensified dramatically. Artificial intelligence requires vastly more computing power than conventional digital services, both to train large models and to generate real-time responses at scale.
Australia has since become the Asia-Pacific's third-largest data centre market, behind only China and India. The local sector is valued at $30 billion, with roughly 80 per cent controlled by five players: AirTrunk, Amazon Web Services, CDC, Microsoft and NextDC.
The Victorian government has been one of the most aggressive suitors for this investment. Economic Growth and Jobs Minister Danny Pearson met key industry players, including NextDC, AirTrunk, Microsoft and Amazon, sixteen times during 2025. When the Sydney Morning Herald reported that a NextDC facility in Port Melbourne costing nearly $1 billion had been approved in just 75 days through the state's development facilitation programme, Pearson was unapologetic.
"We are in a race. We don't want to have a situation where billions of dollars go into NSW and Victorian workers miss out on these factories of the 21st century," he said. He also argued that new data centres could accelerate decarbonisation by locking in long-term agreements to purchase renewable energy at fixed prices, though he acknowledged these arrangements are not mandatory.
The energy and water questions
The scale of resource consumption is the central concern for critics. The Australian Energy Market Operator's 2025 Electricity Statement of Opportunities found data centres consumed approximately 2 per cent of national electricity, but projected that figure could climb to 9 per cent by 2035.
Water consumption is harder to measure precisely, but the industry itself concedes the sector will soon account for 1 per cent of Melbourne's water supply and 2 per cent of Sydney's. The BBC has reported on growing international concern about data centres' impact on water supply, and noise from large facilities has become a live community issue in multiple countries.
Victorian Greens leader Ellen Sandell has been direct in her criticism. "Fast-tracking dozens of data centres is a climate and environment disaster. They guzzle power and water like no tomorrow, and Labor is being reckless rushing them into Victoria when we're heading into a drought and don't have enough renewable energy to power our own homes." She also points to the relatively low number of ongoing jobs these facilities create once the construction phase ends.
The case for the defence
The industry is not without its own substantive arguments. Belinda Dennett, chief executive of Data Centres Australia, a coalition formed last year comprising Microsoft, Amazon, TikTok, AirTrunk and others, rejects the "energy vampire" characterisation. She argues that centralised data centres are far more efficient than the dispersed office-based servers they replace, using up to 67 per cent less energy for equivalent workloads.
Dennett also argues that alarming energy consumption forecasts are distorted by what researchers at Oxford Economics have called "phantom demand": speculative connection applications that are never converted into actual facilities. She cites figures suggesting only one in seven data centre applications for electricity connection actually comes online, meaning aggregate forecasts substantially overstate the real grid impact. The industry group has published its own analysis of flawed forecasting methodology to make this case.
Grattan Institute energy fellow Tony Wood has similarly cautioned against overstating power concerns, suggesting the actual realised demand may be considerably lower than headline projections imply. The industry's relationship with Victoria's investment promotion efforts has also produced concrete economic activity, with construction employment and supply chain spending representing genuine, if temporary, benefits.
The sector also has close ties to the major parties. Data Centres Australia's Dennett previously served as a senior adviser to former federal Labor minister Stephen Conroy during the NBN rollout before moving to Microsoft and then AirTrunk. TikTok employs Sabina Husic, a former senior adviser to both Anthony Albanese and Daniel Andrews. These connections raise legitimate questions about the adequacy of arm's-length scrutiny of the industry's planning and energy claims, regardless of which side of politics benefits.
A suburb, a state, a trade-off
What is happening in West Footscray is not a simple story of corporate greed versus community interest. Australia's appetite for cloud computing, AI services and digital infrastructure is real, and those services require physical facilities to operate. The question is not whether data centres should exist, but how they should be governed, where they should be built, and what safeguards should apply to energy use, water consumption, planning approvals and the treatment of residents who find themselves living beside them.
The Allan government's instinct to compete aggressively for investment is not unreasonable. Losing major infrastructure projects to NSW carries genuine economic consequences for Victorian workers and state revenue. But speed and competition are not substitutes for proper environmental assessment, community consultation and binding requirements on renewable energy use. Voluntary agreements that depend on corporate goodwill are not a policy framework; they are a hope.
For Jacqui Glover, watching another round of excavations from her porch, the abstract debate about megawatts and forecasting methodology is somewhat beside the point. The neighbourhood she chose has been permanently altered, with limited say from the people who actually live there. Getting that balance right, between economic opportunity and local accountability, is a problem that goes well beyond West Footscray.