Australia has become the world’s third-largest destination for artificial intelligence investment, behind only the United States and China, according to a new analysis from the Commonwealth Bank of Australia.
In a research note released Monday, CBA economists said the surge in AI-related investment could help lift productivity in an economy facing low potential growth and persistent inflation. The report was led by economist Luke Yeaman, who highlighted the role of large-scale infrastructure spending in supporting economic momentum.
The analysis points to a rapidly expanding data centre pipeline as the main driver of Australia’s ranking. Planned projects are approaching 6 gigawatts of capacity, with an estimated total value of A$150 billion (about US$105 billion). If current developments proceed as expected, Australia’s installed data centre capacity could more than triple by 2030.
Rising global demand for AI computing power has increased investment in cloud infrastructure, advanced servers and networking systems. Australia has benefited from its political stability, strong institutional framework and growing renewable energy capacity, making it an increasingly attractive location for AI-related infrastructure.
Economists say the investment wave could provide broader economic benefits, supporting construction activity, job creation and demand for electricity and specialised services. More importantly, AI adoption across sectors such as finance, logistics, healthcare and mining could improve efficiency without adding to inflationary pressures.
However, the report also warns that challenges remain. Data centres are energy-intensive, and continued growth will depend on power grid expansion, planning approvals and the availability of skilled labour.
As global competition to build AI infrastructure intensifies, the CBA analysis suggests Australia is well positioned to capture a meaningful share of investment—potentially turning the AI boom into a key driver of long-term economic resilience.