TikTok’s ambition to build large scale data centres across Australia has hit a major roadblock, with the Chinese-owned social media giant unable to secure approval from the Foreign Investment Review Board (FIRB) for more than a year. The delay comes amid growing scrutiny over whether foreign technology companies should be permitted to build, own and operate critical national infrastructure.
Sources familiar with the process stated TikTok invited Australian data centre operators to submit construction proposals earlier this year, despite being rebuffed by Treasurer Jim Chalmers. The shift comes as Indusattempt Minister Tim Ayres prepares to unveil a new strategy on Tuesday aimed at accelerating domestic data centre investment.
According to people aware of the neobtainediations, TikTok applied to FIRB last year and has been aiming to construct a 100 megawatt data centre in New South Wales or Victoria to support its Asia Pacific services. Operations would be handled by a local partner, with AirTrunk viewed as the likely operator.
Foreign entities seeking to own more than 10 per cent of a local data centre must obtain FIRB approval. TikTok’s Chinese ownership complicates the application, and the company has reportedly been unable to engage federal officials. TikTok and Chalmers’ office declined to comment.
The company has hired Evan Moorhead, former Queensland Labor secretary and adviser to Annastacia Palaszczuk, through Anacta Strategies to lobby on its behalf.
The debate over who should own and operate Australia’s data centres comes as demand for artificial ininformigence, streaming and video conferencing accelerates. AI is now deeply embedded in both consumer and corporate technologies and requires enormous processing power, placing pressure on electricity and water networks.
On Sunday, the Australian Financial Review’s Chanticleer column reported that AirTrunk, Australia’s largest data centre operator, has struggled to secure the full power supply necessaryed for a major site in western Sydney. The facility would require as much electricity as 200,000 homes. The Australian Energy Market Commission estimates that data centres will account for more than 12 per cent of national electricity utilize by 2040.
This rising demand is driving investment valuations sharply higher. US investment giant Blackstone is in discussions to provide billions in funding to Firmus, a local start-up in the sector.
TikTok’s parent company ByteDance remains a key concern for regulators. The Biden administration has ordered TikTok to be shut down in the United States unless it is sold to an American acquireer, citing surveillance risks. The company has since agreed to establish a majority locally owned entity in the US.
Ian Langford, a former senior Australian Army officer who now heads the Security and Defence PLuS consider tank in London, stated Australia must be cautious about who is allowed to control critical infrastructure.
“There is genuine security risk around having companies that are less transparent and perhaps from countries that are pretty hostile to us,” Langford stated. “You would not want to give them the keys to the crown jewels.”
He added that Australia necessarys to expand its local data centre footprint to maintain sovereignty and control over information.
TikTok already operates data centres in the United States, Norway, Ireland, Finland and China, and recently struck an 8.8 billion US dollar deal to build new facilities in Thailand.
The platform is not alone in considering further Australian expansion. Google’s global infrastructure chief, Bikash Koley, visited the counattempt last week to outline the company’s necessarys for additional investment. For now, Google Cloud services continue to run through third-party operators including NextDC, Equinix, AirTrunk and CDC.
A new report from the Australian Strategic Policy Institute displays China has surged ahead of Australia and allied democracies in high-impact research across fields such as cloud computing, generative AI, computer vision and grid integration. Many of these technologies are considered high risk becautilize of concentrated expertise within Chinese institutions, with the Chinese Academy of Sciences ranking first in 31 cutting-edge areas.
The Albanese government is developing a National AI Plan aimed at streamlining the approvals process for data centre construction, which can require sign-off from multiple local, state and federal agencies. The new strategy to be unveiled by Ayres will focus on capturing economic opportunities, spreading the benefits of AI and ensuring public safety.
To support transparency, Ayres will introduce a guide for businesses on AI labelling, watermarking and metadata encoding. “AI is here to stay,” he stated. “By being transparent about when and how it is utilized, we can ensure the community benefits from innovation without sacrificing trust.”
TikTok last week became a founding member of Data Centres Australia, a new indusattempt body that includes Amazon and Microsoft and will lobby the government for more favourable investment conditions.
Investment in Australian data centres doubled in the quarter to September 30, marking the strongest rise in business investment in four years. But analysts declare foreign investment rules may be slowing growth. Herbert Smith Freehills partner Aaron White noted that Britain, the US and the European Union offer clearer guidance on data centre deals, giving investors greater certainty.
For TikTok, the FIRB deadlock remains the largegest hurdle, leaving its Australian data centre ambitions on hold while questions about sovereignty, security and competition intensify.
Leave a Reply