Remoteness from conflict is emerging as a key advantage for Australia in the competition to host AI data centres. The country already enjoys great advantages including prospectively abundant and cheap energy from renewable sources.

Israeli and UAE experience over the past year shows why data-centre builders have strengthening incentives to choose Australia.

Cyberattacks against Israel did not start with combat with Iran; they were already building up, tied to Israel’s operations in Gaza and the West Bank. But the Israeli and US attack on Iran last year was followed by an escalation in scale, tempo and intensity of cyberattacks on Israel – and that is leading even Israeli technology companies to look at basing elsewhere.

Following the June 2025 strikes, Israeli software company Radware reported a 700 percent increase in cyberattacks against Israeli targets over two days. Its later reporting found Israel accounted for about 12.2 percent of all geopolitically motivated cyberattacks worldwide in 2025.

A shift away from Israel is already visible. Israeli news website Calcalist has reported that since October 2023 Israeli technology-company founders had been establishing operations and hiring abroad earlier, while reconsidering where development work should sit. It also found that 42 percent of startups had significant development delays because of the war in Gaza. An old assumption that Israeli technology companies’ core work should remain anchored in Israel is starting to crack.

Recent analysis in The Strategist argued that physical attacks against hyperscale cloud data-centres in the United Arab Emirates showed that data centres could no longer be treated in simple commercial terms. Authors James Corera and Jason Van der Schyff made the point that operational self-reliance is a function of resilience. However, resilience does not itself deliver desirability. Cloud providers may be able to absorb disruption, reroute computing tasks and maintain services. That’s resilience, but it does not mean that customers, investors or governments want critical systems operating in an environment where such procedures become routine. They’ll look elsewhere.

Australia is attractive not because it’s perfect but because it’s stable – or, maybe more precisely, predictable. It has stable governance, strong legal institutions, mature regulation, legal enforceability, alignment with Western technology and intelligence ecosystems and distance from Middle East conflict. Australia will remain a natural target for cyber operations, as many nations are, but it’s geographically removed from active conflict zones and unlikely to face the same physical risks, such as missile and drone strikes.

These predictability advantages are combined with proximity to Indo-Pacific markets, abundant land, energy potential and a government willing to connect industrial policy with national interest. The Future Made in Australia legislation signals an intent to link investment, net zero, economic resilience and national capability.

South Australia, for example, has moved from 1 percent renewable energy generation to 74 percent in just over 16 years, with forecasts of about 85 percent this financial year and 100 percent net renewables by 2027. The state also points to more than A$6 billion already attracted into large-scale renewable energy and storage projects and more than A$20 billion in the pipeline.

For power-hungry data centres, energy is not a side issue. It is the issue. AI infrastructure is electricity infrastructure. Computing infrastructure follows power, and power follows places that can generate it, transmit it and price it with confidence.

We’ve been seeing results from such advantages even before Middle Eastern instability underlined the value of Australia’s predictability. Microsoft said in April it would invest A$25 billion in Australia by the end of 2029. AWS said in June 2025 it would invest A$20 billion from 2025 to 2029, including renewables.

However, the opportunity isn’t guaranteed. A 2026 United States Studies Centre report warned that Australia’s growing attractiveness for AI and data-centre investment could be undermined if energy infrastructure, grid planning and approvals processes fail to keep pace with demand. Data centres already account for about 2 percent of Australia’s grid-supplied electricity demand and could reach 6 percent by 2030.

If approvals drag on, grid and transmission infrastructure fail to keep pace with AI-scale demand, or water-intensive cooling systems place growing pressure on local resources without clear community benefit, the opportunity will move elsewhere.

Australia shouldn’t celebrate instability elsewhere, but it should recognise the opportunity created by it. Companies are looking for places where infrastructure can be built, powered, governed and protected for the long term. Australia can be one of those places.