Data centre chaos: We need to learn the lessons from past gold rushes

There is a ‘gold rush’ reflected in the chaos of the rollout of large and mega-data centres.  

We are watching governments scramble to juggle the capture of potential new investment against community and environmental concerns and worries about loss of jobs.

The electricity industry is scrambling as data centres choose sites where the electricity grid was never designed for such large demand. Data centre businesses respond by proposing to buy lots of diesel and gas generators.

Horror stories about impacts of astounding levels of electricity and water use, and social impacts, abound. Some may be correct. But the eventual outcome will be very different from what many fear or predict.

The International Energy Agency’s major 2025 report reminds us that a rapid rate of innovation and efficiency improvement is occurring and Artificial Intelligence, used well, can drive significant multiple benefits for economic productivity, energy, environment, business and society.

But, like most technologies, this will also cause pain.

Some of this can be avoided by effective and creative governments, strong community action and a positive ‘win-win-win’ focused business culture that competently focuses on social license to operate and positive reputation. None of these happen without conscious effort and some conflict.

This situation has reminded me that we should be learning more from past ‘gold rushes’.

The 1850’s gold rush left many people in financial, physical and social distress and devastated mining environments. Many of those who provided equipment, infrastructure and services made a lot of money and spent it on extravagant buildings and ventures.

In Australia’s mining boom, many ‘exciting’ proposals were never built. Naïve or corrupt governments delayed action and locked in shockingly designed taxation and incentive schemes that still cost Australians today. The powerful and well-connected fossil fuel sector has been a particular beneficiary.

The recent ‘hydrogen hype’ is another sad example. Many of the proposals were obviously trying to challenge the laws of science and basic economics. This has had an adverse impact on potentially viable and useful hydrogen projects and research.

A lot of money has been wasted and diverted from other useful areas. This includes the ‘first fuel’ – energy efficiency and productivity. This has been a victim of decades of undelivered strategies, policy and market failures, ignorance and outright opposition from institutions and competing businesses.

These failures have been widespread, including ‘non-energy’ sectors such as building, urban planning, social housing and welfare, transport and more.

There are signs that some Australian governments are learning from the past with data centres and Artificial Intelligence. Let’s hope they don’t get diverted.