Australia Slaps Power, Water, And Copyright Rules On Data Centers After Anthropic Lobbying Push

Over the last year or so, several US states have taken measures to regulate or prevent data centers from being built, citing local concerns over electricity and water use, pollution (noise and otherwise), and the fact that they’re a godawful eyesore. On Tuesday, New York became the first state to enact a one-year ban on data centers. Pennsylvania, meanwhile, is slapping heavy new regulations on them. 

The revolt has gone worldwide – as Australia will impose mandatory national rules on large-scale artificial-intelligence data centers, requiring operators to minimize water consumption, fully fund their power needs and underwrite new electricity generation, Prime Minister Anthony Albanese announced Wednesday.

The measures, part of a broader push to define AI’s “social licence,” come after extensive engagement with AI companies – including Anthropic – and reflect the government’s determination to balance investment attraction with protections for energy resources, the environment, creators, and national interests.

In a major speech at the University of Sydney, Albanese warned of a narrow window to set conditions before major foreign investments lock in - suggesting that the new rules are in response to intense industry lobbying and consultations, while rejecting softer approaches on copyright favored by some tech players.

He also gave assurances to Australian musicians, writers, artists and journalists, declaring that they must retain ownership and control of their work – including the right to name their price in any AI licensing deals.

“Anything less is theft,” he said. “No company should use Australian books, music, art or news to build or train AI without the artist’s control.”

The remarks push back against proposals from AI developers, including Anthropic, which had advocated for alternatives such as a shared creative fund. Albanese made clear the government would not dilute existing copyright principles. He told reporters he was unconcerned that the firm stance would deter investment, noting direct meetings with companies including Anthropic where the position was conveyed plainly.

“We’re confident the advantages that Australia provides will see significant investment here,” he said.

Anthropic’s general counsel, Jeff Bleich, responded positively, saying the company respects the process and takes seriously its responsibility to meet the Australian government’s terms for AI developers. He noted that societal-level solutions are needed given AI’s benefits and challenges for economies and national security.

Data-Center Rules Target Resource Strain

The mandatory standards, to be agreed at a National Cabinet meeting next month and legislated early next year, will replace fragmented state-level approaches. They will specify permissible locations for data centers and impose obligations on power and water use.

Operators must pay the full cost of grid connections, underwrite new generation capacity, and contribute at least as much energy to the grid as they consume – including renewables backed by firming power – so households do not bear the burden. Water use must be minimized, with companies covering additional infrastructure costs where needed.

Albanese framed the rules as essential for sovereign capability. “Our great country can be much more than a data warehouse for AI products made overseas,” he said.

The approach aims to provide investor certainty while preserving community confidence. South Australia already maintains a dedicated framework, while Queensland has expressed caution on national renewable-energy proposals.

Coordinated Oversight and Worker Input

A new Office of AI will be established within the Department of the Prime Minister and Cabinet to coordinate efforts across portfolios ranging from education and employment to energy, copyright and defence.

On the labor front, Albanese encouraged workers to engage actively in shaping AI deployment in their workplaces rather than being sidelined. Businesses could reap “massive productivity benefits,” he said, but employees have a stake in ensuring those gains translate into better conditions. ACTU Secretary Sally McManus welcomed the coordinated national approach and stressed employers’ duty to consult and mitigate harms.

The only question is – will New Zealand step up and protect Flight of the Conchords from AI replicants and copyright malarkey?