Our Director and Private Wealth Adviser, Joshua Barker, appeared on The Open of AusBiz on 17 October 2025 to discuss the rapidly evolving landscape of ASX-listed data-centre operators — and his preferred name in the sector.
AI, Infrastructure and the Data Centre Boom
Ever since artificial intelligence burst onto the scene, it has continued to gain momentum — setting unprecedented records along the way. From NVIDIA’s market cap surpassing US$5 trillion to monumental infrastructure spending by the world’s largest companies, the AI revolution is driving a once-in-a-generation build-out of digital capacity.
NVIDIA alone plans to invest up to US$100 billion to support new data centres and AI infrastructure for OpenAI. Global forecasts suggest demand for data centres will double over the next five years, while Europe aims to triple capacity within the next decade. Major technology leaders, including Amazon, Microsoft, and Meta, have each committed billions of dollars to new facilities in Europe, with Google planning three additional hubs in Greece.
This surge of investment mirrors what we are seeing here in Australia. Just as Macquarie’s sale of its data-centre business drew global attention, local operators are increasingly being recognised as critical to the digital and AI economy.
The Macquarie Deal: Global Capital Meets Australian Expertise
Earlier this year, NVIDIA, BlackRock, Microsoft, Temasek, MGX and xAI jointly announced the US$40 billion acquisition of Aligned Data Centres from Macquarie Asset Management. Aligned operates (or has under development) over 5 gigawatts of capacity across approximately 80 data centres in the U.S. and Latin America — a major strategic footprint combining global capital with real assets.
This underscores a powerful investment theme: combining Australian property with the AI infrastructure opportunity.
Why Data Centres Matter to Australia
While most new data-centre capacity is being built in the United States, the need for local facilities in Australia remains vital. Data sovereignty requires that sensitive or government data be hosted domestically, ensuring national security and economic independence.
Macquarie Data Centres recently announced a partnership with Dell to deploy NVIDIA-powered technology within Australia, strengthening the nation’s sovereign digital capabilities. Similarly, SHARON AI, Australia’s leading Neocloud provider, has signed agreements with NEXTDC to materially expand its footprint — adding up to 50 MW of additional capacity across NEXTDC’s Australian and Asia-Pacific network.
“AI infrastructure is the foundation of the intelligence economy,” said Craig Scroggie, CEO of NEXTDC. “SHARON AI, in collaboration with NVIDIA, is deploying sovereign, high-density GPU capacity engineered for AI at speed and scale. This highlights the essential role of secure, sovereign infrastructure in enabling growth across the region.”
The Investment Landscape: The Good, Bad, and Ugly
From an investor’s perspective, the ASX offers several key exposures to this theme:
NEXTDC (ASX:NXT)
Australia’s pure-play data-centre operator and developer.
- Established business model with operating assets and a strong development pipeline.
- Direct exposure to sovereign infrastructure and AI-driven expansion.
Macquarie Technology Group (ASX:MAQ)
Diversified exposure across telecom, cloud services, cybersecurity, and data centres.
- Services 42% of federal agencies and operate in regulated environments.
- Key consideration: integration risk — ensuring operational efficiency as assets scale.
DigiCo REIT (ASX:DGT)
High leverage and financing exposure due to the capital-intensive nature of data-centre assets.
- Market scepticism remains around valuation and margin sustainability.
- Growth expectations must be validated through leasing performance.
Goodman Group (ASX:GMG)
While not a pure data-centre operator, Goodman offers a safer, industrial-property-backed way to play the theme, benefiting from long-term structural demand for logistics and infrastructure assets.
Final Thoughts
Data centres are among the most capital-intensive infrastructure projects globally. While spending in this space is accelerating, many projects remain under construction or are yet to become operational. These assets also require specialised expertise in design, power management, and cooling — including substantial water usage, which currently poses less risk in Australia than in other regions.
Given its established track record, NEXTDC (ASX:NXT) stands out as the favoured pick in this sector — offering investors a proven operator with an extensive national footprint, a strong management team, and clear alignment with Australia’s sovereign data and AI ambitions.
Disclaimer:
This commentary is intended for general information only and does not constitute personal financial advice. You should consider your own objectives, financial situation, and needs before making any investment decisions.